After a weak week, gold shines again

Standard gold on Monday opened higher at Rs 7,910 to increase by Rs 35 per ten gram to close at Rs 7,900 and pure gold gained Rs 45 to open at Rs 7,955 and finally settle at Rs 7945.

Silver ready was up by Rs 65 to close at Rs 14,215 per kilo.

Gold prices have eased by Rs 300 last week to close at Rs 7,865 per ten gram on the bullion market on increased selling by stockists. The decline in international gold also weakened the sentiment.

In International markets, London gold prices declined by $21.35 at $547.25 from a week ago level of $568.60. The fall was attributed to rise in Fed rates by 25 basis points to 4.50 per cent.

The gold prices in domestic bullion market have fallen all the six days with standard and pure gold prices down by Rs 325 and Rs 330 per ten gram respectively.

Gold was also bolstered by a weaker dollar impacted by the release of US data which revealed plunging US orders for durable goods.

The market group has projected a 4.1 per cent rise in world gold supply to 113.5 million ounces in 2006. Mine production witnessed a rise last year to 2,494 tonnes despite a near 50 tonnes fall in production the South Africa, the world's largest gold producer.

The physical market group has forecast a sharp fall in gold sales of over 40% for H1, 2006. Central Banks of Russia, Argentina and South Africa are showing interest in increasing their gold reserves. China also has plans to diversify from dollar based assets.