Gold at Rs 15K/10gm! Will Indian brides go goldless?

February 12, 2009

Commodity Online
MUMBAI: Will Indian brides go to the wedding without gold jewellery this season? It seems so if the soaring gold prices are any indication.

India’s marriage season has just started and people are feeling the pinch already with gold prices setting new records.

On Wednesday, the gold ended at a record high of Rs 14,710 per 10 gm in Kolkata on the back of global rally.

In Mumbai, standard and pure gold shot up by Rs 335 each to Rs 14,390 and Rs 14,450 per 10 gm, respectively.

In Delhi, gold spurted by Rs 310 to a record Rs 14,550 per 10 gm, and in Chennai, the metal gained Rs 235 to Rs 14,395. In international markets, gold jumped more than 3% as investors put bet on gold as a risk aversion strategy.

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In London, spot gold rose to $944.20/946.20 an ounce from Tuesday’s New York close of $914.00.

These prices are unheard of by India buyers and they are shying away from jewellery shops now. Most of the people are adopting a wait-and-watch policy as they don’t want to buy gold at Rs 14,500 per 10 gm.

With the marriage season in full swing, prices are hitting new peaks each day, making the commodity almost unaffordable for the retail user.

Another boom is in the gold scrap market. With the prices touching record highs, jewellery shops are seeing more sellers than buyers because consumers prefer to cash out at the current level.

But it’s not domestic demand that is driving prices this season. Bullion traders said the firm international prices, which are a combined result of the US economic weakness and a slide in the dollar value, are the main reason for the latest run-up.

A similar surge was also witnessed in silver on sustained support from buyers following a steep rise in international prices. In Delhi, ready silver (.999) surged to Rs 20,400, a gain of Rs 1,150 per kg in a single day.

In Chennai, the white metal shot up by Rs 750 to Rs 22,440 per kg while it rose by Rs 465 to Rs 20,925 per kg in Mumbai on Wednesday.

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