Gold Leaves Crude Track, Shines at Record Peak
By Nimish Shukla
AHMEDABAD: Deepening worries over global financial markets have sparked off a gold rush. In the last 24 hours, gold prices in the international markets recorded a historic 12% jump of $110 per ounce to settle at around $890 on Thuesday evening.
In the domestic markets too, the price of ten grams of gold jumped from Rs 11,700 to Rs 13060, in the last 24 hours. Analysts said gold has regained its sparkle as an alternate investment option in global as well as domestic markets as investors were disillusioned by the plunge in stock markets following the deepening of credit crisis in the US.
Navin Mathur, head, commidity division, Angel Broking, “Gold stands apart from other asset classes because of the uncertainity prevailing in the markets. Traditionally, gold is supposed to be the safest bet in disturbed conditions.”
While gold and crude prices were moving in tandem over the last many months, they have parted ways over the last ten days or so. From September 8 onwards, while crude prices have fallen by around 8%, gold has jumped by 10%.
Devarsh Vakil, a commodity analyst with Anagram Securities, said because of uncertainities in economies worldwide, demand for crude is falling while gold is being seen as a safe haven for investments. “This firmness in gold prices is expected to continue in the coming days,”. The rising gold prices has also had a positive impact on the exchange traded funds (ETFs) of Reliance, Kotak and Gold Bees which rose by around 7% in the last 24 hours.
“We are looking at mid term increase in gold in view of the festive season and usual higher price for gold during year end,” said Kalpit Shah of ABN-AMRO, who says many of his clients who took the advisory issued two days back to buy gold certificates had benefitted handsomely.
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