Gold is set to become dearer next week as refiners are unwilling to sell at the prevailing low prices, especially when Jim Rogers has forecast a bull run in agri and non-agri commodities.
Rogers, the world’s leading commodity investment expert, said in Bangkok last week, “Unless the supply multiplies, demand slumps or economies crash, the commodity boom is likely to continue.”
However, tough times are in store for India as jewellers stock up ahead of the festive season, including Dussehra, Diwali, Christmas and new year. Availability is an issue, said Suresh Hundia, president, Bombay Bullion Association (BBA), while hoping that supply will normalise in a fortnight.
“India imports gold bars weighing a maximum one kg and 100 grams, compared to the standard bar size of 12.5 kgs. Therefore, the availability of 1 kg and 100 grams bars is tight,” he added.
The demand for gold surged across the country in August after seven lull months. A total of 65 tonnes of gold has already been imported in this month, against 74 tonnes in the corresponding month last year. In contrast, the gold imports in June and July were a mere 23 tonnes and 22 tonnes respectively.
The gold demand in India may surpass last year’s sales of 743 tonnes. But the price needs to range between Rs 10,800 and Rs 11,800 per 10 gram, said Hundia.
“Gold behaves according to inflationary concerns and political developments. The global developments may keep the dollar afloat, resulting in wide-ranging volatility in the yellow metal prices,” said Jayant Manglik of Religare Enterprises.
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The dollar has been volatile against major global currencies. Last year, the world’s widest accepted currency rose against the euro as a government report showed that European industrial orders fell the most in more than six years in June, adding to signs of a deepening economic slowdown. The currency gained 0.7 per cent against the euro on Friday.
Gold for immediate delivery fell over one per cent to $829.50 an ounce in afternoon trades in London. The futures for December delivery fell 0.5 per cent to $834.70 in electronic trading on the Comex division of the New York Mercantile Exchange.
On a weekly basis, however, the precious metal registered a gain of 3.5 per cent or $27.76 to close at $824 in London. In Mumbai’s spot bullion market, standard gold rose 3.5 per cent or Rs 400 to Rs 11810 per 10 gram and pure gold moved up by Rs 410 to Rs 11880 per 10 gram.
On the MCX, the gold April 09 contract rose by 2.60 per cent to Rs 12,136 per 10 gram and gold M September 08 contract went up by 1.68 per cent to Rs 11,761 per 10 gram. Gold guinea September 08 contract rose by 1.09 per cent to Rs 9,467 per 8 gram.