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Our Bureau

Mumbai, Jan. 14 Gold prices for 2008 were projected at $900 an ounce at the November 2007 conference of the London Bullion Market Association in Mumbai; but little did one expect that this price mark would be reached so soon.

The yellow metal touched $900 an ounce in the very first fortnight of the New Year.

The rally in gold, sparked by high crude oil prices, began on January 2 this year at $840.75 an ounce. Fears of inflation in the US have taken the yellow metal all the way up to $911.50 (London A.M fixing on January 14).

Gold prices in India have never seen such levels before, which has led to a drying up of demand. On Monday, the metal quoted at Rs 11,575 per 10 gm (99.5 fineness) and Rs 11,445 (99.9) per 10 gm.

The corresponding prices on January 2 were Rs 10,716 (99.5) and Rs 10,815 (99.9).

The factors that were considered at the November conference (estimating gold at $900 an ounce) are very much in play today – the weakening of the dollar, higher oil prices, global financial security concerns, and geo-political and inflation concerns.

As a result of the high prices, the markets are witnessing higher scrap sales, said a bullion dealer.

More Stories on : Gold & Silver | Commodity Markets

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