INTERNATIONAL. Gold prices hit a record in India Tuesday after global bullion prices topped US$960 an ounce and the Indian rupee weakened, deterring buyers of the imported metal.
April delivery gold gained as much as 2.9% to INR15,140 rupees (US$307) for 10 grams on the Multi Commodity Exchange of India, (MCX) the highest ever since the Mumbai-based exchange started trading the metal in November 2003.
Gold for August delivery gained 2.31% to INR15,050 a 10 gram and the June contract was up 2.10% to INR15,039.
“Record prices have seriously hurt demand,” Rajesh Mehta, chairman of Rajesh Exports, India’s biggest jewelry producer and exporter, told Bloomberg. “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% 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.
The Indian rupee has declined 19% in the past year, making gold imports expensive.
India has not imported any gold so far in February because record-high local prices have discouraged demand, the head of the Bombay Bullion Association (BBA) said on Friday.
“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.
"Wedding buyers have either kept their purchases on hold or they are exchanging old for new," Haresh Acharya, head of bullion desk with Parker Agrochem Exports said.
On the global markets, gold hit a seven month-high on Tuesday as the US$950 resistance point was breached and the spectre of global economic instability lingered.
New York gold futures reached their highest level since July, with the most active April contract rising as high as US$961.1 an ounce, up US$18.9, or 2% from Friday's New York settlement of US$942.2 in after-hours trading.
US markets were closed on Monday for the Presidents' Day holiday.
The dollar rose Tuesday and while a stronger dollar typically weighs on gold, the relationship has decoupled recently as both benefited from safe-haven type buying.
Source : www.bi-me.com