India gold posts record, scrap selling picks up
Asia's gold physical market burst back into life on Thursday after months of lacklustre trade, with prices hitting an all-time high in top consumer India and dealers reporting a surge in scrap trade on buoyant sentiment.
August 23, 2012 / 14:52 IST
Asia's gold physical market burst back into life on Thursday after months of lacklustre trade, with prices hitting an all-time high in top consumer India and dealers reporting a surge in scrap trade on buoyant sentiment.
Spot gold broke out of the USD 100 range it has held since May and hit USD 1,666.9 on Thursday, encouraged by minutes from the latest Federal Reserve meeting that showed the central bank is willing to further easing its monetary policy soon."I finally feel alive again," said a Singapore-based dealer, "We've seen quite a bit of scrap come in today, even as Indonesia remains closed."Consumers and investors sold their old jewellery, bars and coins to take advantage of the price rally after gold had been trading listlessly for a few months.More selling may be on the way, especially as Indonesia returns to business next week after Eid al-Fitr celebrations, dealers said.Some potential sellers were waiting for better selling opportunities."At this level we don't see any buying, and sellers are waiting for higher prices," said a Hong Kong-based dealer, adding that the premium had fallen to as low as 80 cents per ounce, from last week's USD 1-1.50.GOLD IN RUPEE HITS ALL-TIME HIGHIn India, traditionally the world's No.1 gold consumer, gold prices in rupee terms hit a record high. Gold futures on the Multi Commodity Exchange jumped to Rs 30,677 per 10 grams."Demand is weak, but may improve if prices rise by another 500 to 1,000 rupees," said a Mumbai-based dealer with a state-run bank dealing bullion.India's gold imports might slump 40% from a year earlier during the September-December period due to a weak monsoon, fewer wedding dates and lofty prices, said the Bombay Bullion Association.Elsewhere in Asia, Japan's gold market was relatively quiet."A strong yen makes gold prices unattractive to sellers," said a Tokyo-based dealer, adding that he offered 75 cents discount on buying scrap.In Singapore, gold bar premium was quoted in the range of 50 to 80 cents above London prices, dealers said.WEEK AHEADMarket participants will closely watch the central bank symposium in Jackson Hole, Wyoming late next week, seeking more signs on the Fed's stimulus plan. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
