Indian Gold Prices at Record, Cooling Jewelry Demand
With constant hammering of stock market gold is fast emerging as the best source of invesmtment. Gold zoomed past all previous records to set a record .
Gold dealers said melting stocks and forex markets left no other option for investors other than gold and they rushed park their funds in bullion.
Gold reached a record in India after bullion prices climbed above $950 an ounce and the Indian rupee weakened the most in a month, cooling demand for the imported metal by the world’s biggest consumer.
April-delivery gold gained as much as 2.9 percent to 15,140 rupees ($307) for 10 grams on the Multi Commodity Exchange of India Ltd., the highest since the Mumbai-based exchange started trading the metal in November 2003.
“Record prices have seriously hurt demand,” Rajesh Mehta, chairman of Rajesh Exports Ltd., India’s biggest jewelry producer and exporter, said in a telephone interview from Bangalore. “The economic slowdown isn’t helping demand either.”
Highest-ever prices may crimp demand for bullion from Indian housewives and jewelers in the wedding season started last month, slowing a rally that’s pushed global gold prices up 30 percent in the past three months. Imports this year by the Asian nation may more than halve to 250 tons from 720 tons in 2008, Mehta said.
India’s gold purchases have fallen for three straight months, with imports plunging to about two tons in January from 24 tons a year ago, according to the Bombay Bullion Association Ltd. Record prices have spurred housewives to sell old jewelry, traders said.
“With prices having crossed the psychological 15,000 mark, there’ll be a queue of people selling scrap gold tomorrow,” said Suresh Hundia, the association’s president. There have been zero imports so far this month, he said.
Immediate-delivery bullion added as much as 2.1 percent to $961.79 an ounce, the highest since July 22, as investors bought the metal as a safe-haven asset.