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Gold firmer, but buyers still shopping
Mumbai, August 21: Gold prices were higher on Thursday as foreign markets firmed up tracking crude oil, but dealers said demand continued to be strong as the metal's recent falls below psychological levels had already attracted consumers.
"Demand has gone through the roof," Vinod Hayagriv, managing director of C. Krishnaiah Chetty & Sons, a jewellery retailer in Bangalore, told agencies. "We have seen a lot of consumption in the last 15 days mainly from people who had postponed buying in the last few months."
Foreign gold, that guides the local market, was up as crude rose on political tensions and the dollar fell with speculators exiting, spurring safe haven buying in precious metals.
Gold generally moves in tandem with crude oil as the latter signals inflation, while the metal negates it. But the metal has an inverse relation with the dollar as the two compete for funds.
A dealer in a large private bank said premiums had shot up to around $6 an ounce compared to about $2.5 last week as foreign suppliers were still grappling with the sudden surge of demand world over in the wake of sharp corrections.
The delay in shipment was at two and a half to three weeks, the dealer added. Gold prices broke below 13,000 rupees per 10 grams last month as speculators moved out of crude oil bringing it down overseas.
The metal then broke below 12,000 rupees, early this month, a fall pounced upon by consumers who had seen gold rally up to the highest level ever in July. Following was the price of .995 gold in the spot market in rupees per 10 grams at 1:15 p.m.
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