India Gold hits record high of 27,996 Rupees per 10 grams!

With the gold prices touching an all-time high, many buyers waiting for a correction kept their purchases on hold, while some took the plunge – hoping to benefit if the upward march continued. The skyrocketing price of gold has made an impact on the purchasing patterns of the buyers in Gujarat’s Ahmedabad city.

Gold Price hit records in INDIA
Gold Price hit records in INDIA

Price of commodities has increased very much, due to which we feel that we would be unable to buy anything in the near future,” said Nehal Patel, a customer, adding that she had already pared down her purchases because of the steep prices. The jewelers, however, advised the people to invest in gold, insisting that given the current global economic scenario the price volatility would be minimal in the jaundiced metal.

MUMBAI: India’s gold futures are likely to extend the previous session’s gains on Friday morning to hit a fresh peak and may rise above 27,996 rupees, following a rally in the world market, analysts said.

* International spot gold surged to record highs on Friday for a second consecutive session as investors reached for the safety of bullion amid a worsening economic outlook for the United States and concern about the health of Europe’s banks.

* The rupee plays an important role in determining the landed cost of the yellow metal and copper, which are quoted in dollars. The Indian rupee slid to its lowest in over six months on Thursday. India’s currency, bond and interbank cash markets will be closed on Friday for a local holiday.

India’s copper futures are likely to open steady with a positive bias on Friday morning on marginal gains in the London market, analysts said.

* London copper inched up on Friday, after dropping more than 2 percent in the previous session, while a slew of lacklustre US data and lingering worries about euro zone debts continued to weigh on sentiment.

“The customers also get anxious as they don’t know what the prices will be today or tomorrow. So, there is a situation of uncertainty, and definitely an atmosphere of insecurity prevails in the entire market. Market can further rise or fall by 2000-3000 rupees. So, nobody can predict anything!”

said Lalit Agarwal, a jeweller. International spot gold gained more than three percent on Tuesday, roaring to an all-time high for a second consecutive session to stand above 1,770 dollar as equity markets dived on growing fears of a global recession following last week’s U.S. credit downgrade.

Analysts maintain that the high cost of living in India is also playing spoilsport and will affect the demand for gold. Triggered by rising food and commodity prices and higher fuel costs, the Indian diaspora would prefer to defer purchases of gold and silver items.Analysts have said that India could see some slowdown in capital inflows going forward as advanced economies exit from the easy monetary policy, making it tougher to fund a widening current account deficit. If oil and commodity prices remain elevated, as is expected, the current account deficit will remain significant, they said.

Generally though, gold is seen as the ultimate hedge against inflation. While the Dollar may lose value, depending on the fortunes of the economy, gold historically goes up in value when inflation gathers pace. Weakness in the Dollar is set to contribute to gold’s strength. Gold prices often move inversely to the US Dollar, as gold becomes less expensive for buyers using other currencies.