Gold buying doubles as prices fall
Nimish Shukla
[ 9 Jan, 2007 0010hrs ISTTIMES NEWS NETWORK ]
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AHMEDABAD: Gujarat's bullion market, which had lost its sheen due to poor offtake of gold, is regaining its glitter as demand for the yellow metal has doubled in the past four days with the gold price dipping over six per cent in the past week.
Fresh investment demand coupled with renewed buying interest among jewellers has brought gold back to the centrestage in the spot market.
Gold sales have increased from 250 kg a day to 500 kg a day in the Gujarat market following the crash in prices in the global markets.
"As the gold prices continue to dip, overall demand for the gold has increased by 100 per cent in the past few days. Our daily sales of gold have increased from 25 kg to 50 kg a day," said Monal Thakkar of Amraplai Industries, a leading bullion firm.
For the past seven days, the per ounce price of gold has come down from $645 to $609 as the dollar has regained lost ground following an increase in US job creation in December 2006. The gold price in the domestic markets too has come down from Rs 9,300 to Rs 8,950 per ten gram.
"The spurt in the gold demand is mainly due to lower prices. Fresh demand is coming from investors and jewellers. Majority of the jewellers are increasing their inventories as they feel that the price below Rs 9,000 is a reasonably good level," said Girish Choksi, past president, Ahmedabad Bullion Association.
Though there is a fresh round of buying in the markets, bullion analysts feel that gold is expected to lose further ground following the expectation that the US Federal Reserve may increase interest rates," Anagram Comtrade vice-president Anupam Kaushik said.
Kaushik said that during 2007, gold has the potential to rise to $750 but it could touch $560 on the downside.
http://timesofindia.indiatimes…l/articleshow/1101124.cms