Festival, weak dollar make gold prices peak at Rs16,120 in Mumbai
14 Oct 2009
The price of gold reached a new high of Rs16,120 in Mumbai in the festival season, with the rise in oil prices and a weak dollar being other contributing factors. In London, it reached a new high of $1,068.15.
The yellow metal traded at Rs16,385 per 10 gm in Kolkata, and in Delhi at Rs16,120, while in Chennai it settled at Rs16,070.
The new high in Mumbai was Rs190 more than yesterday's price, breaching the previous high of Rs15,980 reached in September.
12 October, the day of Pushya Nakshatra regarded as eing auspicious for buying precious metals, saw a steep rise in demand. Sales on this day were reported to be 20 per cent to 40 per cent higher compared to last year on the same day.
The price of crude oil reached $74.27 a barrel, recording a $2 rise from the day before. The dollar was trading at a 13-month low against the euro on Tuesday, making gold and silver attractive.
Two days following Diwali, on dhanteras, another day considered auspicious for buying metals, more brisk business is expected.
According to one wholesaler, the steep rise in price has had a depressing effect on consumer demand which is about 60 per cent lower than that in last year. Another trader expects a 15 per cent decline in volumes from last year's.
The futures market also witnessed a corresponding rise in gold price at Rs16,040.