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Moneycontrol.com >> Message Board >> View Messages >> Odd One Out
   You are here :     Moneycontrol     MMB      General      Odd One Out
Its woman at loss not trader / invester (1)   18-Jul-08 12:35Tracked by (0)  
Posted by:   zoombusiness on ( 18-Jul-08 12:35 )
The yellow metal has come to the rescue of the crestfallen stock market investors. Burdened by heavy debt since the January bearhug, the investors have been shedding off their gold to pay off their outstanding dues.

Amid increasing gold prices, bullion markets across Mumbai saw close to one tonne of gold ornaments being sold off by investors, pushing trade volumes up by 200%, while in Ahmedabad volumes jumped by 50%.

While Sensex nose-dived 40% since January 2008, gold shot up by Rs 4,750 per 10 gm (between July 16, 2007-July 16, 2008), giving respite to investors.

Mumbai bullion markets that used to buy back 10 kg gold jewellery from the market daily before January 2008, saw volumes shoot up to 30 kg no sooner the market crashed. In Ahmedabad too, volumes surged from 8 kg per day to 12 kg.

"Many players maintained their positions in the market till the sensex touched 18,000 points. However, they gave up their positions once they started facing liquidity crisis. Under those circumstances, many players sold gold ornaments to sustain in the market," said Malav Shah, research head of Ahmedabad-based Monarch Projects and Finmarket.

He said day traders were busy getting involved in overtrading and were not in a position to square off their position.

"The amount of difference to be paid also increased, compelling them to sell off their gold ornaments in the markets. Though real estate and fixed deposits could have been used, gold ornaments were the ideal alternative for them owing to high returns," he observed.

Suresh Hundiya, president of the Bombay Bullion Association told ET that, on account of heavy losses in the stock market, the investors had sold gold ornaments in the bullion markets.

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