Gold spiked in the London trades today, recording fresh gains as it became clear that the demand from the largest Gold importer would increase in case of a decline in the prices in the current year. The World Gold Council stated yesterday that Indian consumers would buy gold as an investment option in 2009 when prices drop, which will help India witness a strong demand. COMEX Gold futures for April hit a high of $995, inching towards its all time high of 1033 last year. The counter was last seen quoting at $991.40, up $14.90 per ounce from the previous close.
"The combination of gold's safe heaven appeal and extreme uncertainty surrounding other asset classes should see consumers continue to take advantage of any dips in the price - the investment motive to buy gold in the region remains strong," World Gold Council (WGC) said in its latest report on 'Gold Demand Trends'.
The global Gold market has been in a supply deficit for most of the last quarters and a similar situation is likely o prevail over the next few years with the mining sector in countries like South Africa and Canada already facing headwinds due to the current turbulence in the global economy.
Diversification into gold out of traditional asset classes such as stocks, bonds and currencies by many non-gold investment funds has driven holdings of the popular bullion-backed, exchange-traded funds (ETFs) to record highs. A World Gold Council report released on Wednesday showed physical gold demand rose sharply in the second half of 2008.
Identifiable investment demand for gold, which includes ETFs, bars and coins, was up 64 percent in 2008 over the year before, reported the WGC.
MCX Gold futures for April hit an intraday high of Rs 15874 per 10 grams and currently trades at Rs 15853, up nearly Rs 400 or 2.60%from the previous close. While futures rallied, the local Gold prices hold on after a strong momentum in last session with ready quotes hovering above Rs 15000 mark steady across the country. The spot gold of standard 0.995 variety traded at RS 15500, its yesterday's levels only. The prices have gone up nearly 20% in last one month.
source: Capital Market