| The current price of gold is its second high since November 27 last year, when it touched Rs 6710 per 10 gms. Gold for immediate delivery touched $468.65 an ounce on Monday, the highest since January 1988 as oil prices jumped 7 per cent on concerns that Tropical Storm Rita may strengthen into a hurricane before striking Texas. But on Tuesday, the gold price in London was quoted at $466.6 at the time of writing this story. |
| Investors buy gold to hedge against inflation, which erodes the value of other fixed-asset investments, such as bonds. MCX has started gold bond which has picked up well. |
| "A number of factors are supporting the rising gold prices. First, festival demand has started in India. Secondly, marriage season is approaching soon, for which people have already started preparations. Thirdly, crude prices are going up. Fourthly, the devastation at New Orleans affected American economy a lot. All these factors are supporting the upward move," said Lalit Kumar Dongre, branch manager, PEC Ltd. |
| "There is no doubt at all that gold prices in India would be Rs 7,000 by the first fortnight of November. But, it would start declining and by January, prices (of gold) would come to the normal level, that is, Rs 6,200-6,400 per 10 gm," he added. In India consumption has gone up dramatically and it is still growing at 5-10 per cent. |
| "Central Bank's planned offloading would certainly affect the market but in India import is done through nodal agency and Reserve Bank of India is actively involved into it. Hence, the central bank's action would affect the international market," Dongre added. |
| "Domestic jewellers book profits when prices hit a new high. Again they take position when price declines. This time also the history can repeat itself," Dongre quipped. |
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