Gold is inching steadily towards the psychological barrier of $650 in London amid a weakening dollar, higher consumer demand and a fall in oil prices. |
The London market opened on a weak note after the New Year holidays, but bulls soon took charge as fresh funds were pumped in, eyeing the current price level as an opportunity to derive good returns. |
Within hours of the beginning of trade in London, gold prices surged to a four-week high at $640.7 an ounce. However, profit-booking at that level by a section of traders brought the price down to $639.2, still higher than the closing level of last week. |
Although sentiment was bearish with the absence of Japanese traders on a national holiday, traders remain optimistic that gold prices will breach the $670 level very soon. |
As for Asia, trade was thin throughout with the holiday mood still ruling the market. Trade in Singapore "� the centre for bullion trading in Southeast Asia "� remained closed today. |
Gold's strong performance at the start of the New Year would surely encourage more investors to buy the precious metal, traders said. |
The yellow metal surged to a 26-year high at $730 on May 12 after fund managers poured money into it on worries about rising energy costs, tension in the West Asia and uncertainty over the dollar's movement. The current rise is mainly attributed to Zimbabwe government's strict action to curb illegal mining. |
In the domestic market, however, the weak sentiment prevailed despite strong fundamentals and supportive overseas notes. In the Mumbai non-ferrous metals market, gold gained Rs 35 to close the day at Rs 9,210 (99.5) per 10 gm. Pure gold too went slightly up "� by Rs 35 to be precise "� to end the day at Rs 9,260 per 10 gm. |
In Zimbabwe, approximately 16,000 people have been arrested as part of a three-week long campaign in a series of raids conducted in the country's main mining areas. |
Police seized more than 5,00,000 kg of gold and 5,000 diamonds and burnt down temporary homes used by illegal miners. As per Abare, Australia's independent government economic research agency, gold prices will average $670 an ounce in 2007, 11 per cent higher than the estimated average of $606 in 2006. |