Yellow metal price regains firmness on Gold Futures, hedging

Singapore (Oct 20)  Prices of gold increased in the domestic and international bullion market following improved demand from hedgers and Gold Futures speculation on day’s physical price parity.

The yellow metal was traded at Rs 61,366 per tola, up by Rs 468 per tola. In grammage term, gold moved up by Rs 444 per ten grams to stay at Rs 52,667 per ten grams.

Generally investors turn to gold whenever dollar starts declining and oil prices move higher.

Investors had naturally to allocate money to sectors that would make money, either in stocks or in bullion market.

However, escalation of gold prices in the local markets is not proportionate with the upsurge in international markets. This is because the demand for gold declines locally whenever it turns dearer globally.

Gold was trading in local markets at cheaper rates than Dubai and Saudi Arabia, where people have purchasing power. Here purchasing power of general public has fallen, so they don’t buy gold when it gets expensive because it is not an essential item.

Buyers made deals according to their immediate needs. Local trading in gold remained dull on back of insignificant buying.

DailyTimes