Barring a few technical corrections, precious metals and platinum group metals (PGMs) are likely to continue the bull run next week on strong fundamentals. |
Investment demand, buzz of a 50 basis point rate cut by the US Federal Reserve and high consumer demand from developing economies, including India and China, are likely to drive prices to historic highs. |
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While gold and silver are projected to set new records at $925 an ounce and $17 an ounce respectively, PGMs, consisting of platinum, palladium and rhodium, are likely to breach their respective all-time highs as wells. |
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Platinum is on course to hit $1,600 an ounce while palladium may touch $400 an ounce. Following suit, rhodium may reachthe $7,500-mark in the weeks to come. |
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Jayant Manglik, head of commodities at Religare Enterprises, said, "The bullishness in precious metals, especially gold and silver, will continue throughout this year as investment funds have taken long positions in this market. |
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With the world GDP doubling in the last four years, the potential for buying even at high prices has risen. However, Rajiv Popley, director, Popley & Sons feels that consumers would start buying once prices stabilise. |
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"Retail investors are totally absent from the market as they expect a correction. However, overall sentiment will remain positive," says Popley. |
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Gold exchange traded funds (ETF) will strengthen existing fundamentals, thereby leading to an spurt in demand in India. |
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Manglik believes that the total number of ETFs in India will go up to 15 in the next one year from four at present. |
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"The investment in gold ETFs will translate into the physical delivery of the metal. Therefore, the demand is likely to multiply in the years ahead," Manglik said. |
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Meanwhile, rhodium, which is presently quoted at $5,700 an ounce, climbed to $6,275 an ounce, a 16-year high, last year. |
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The gold rally has spurred other precious metals as well, with platinum hitting a record high and silver surging to a 27-year peak. Gold for February delivery on the New York Mercantile Exchange jumped $6.50 to $900.10 in early morning trade yesterday. But later slipped to $898.70 an ounce on profit-taking. |
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Platinum for immediate delivery in London reached a record $1,563.25 an ounce on January 9. The metal, used in jewellery and as a catalyst, is rising on supply deficit estimates this year. Sources said that the metal would remain in short supply by 30,000 ounces by year-end, compared with 265,000 ounces last year. |
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