New Delhi, June 1 (IANS) The retail price of gold for jewellery breached the Rs.19,000 mark for 10 gm for the first time ever in the national capital Tuesday on account of the surge in global spot and futures markets, but settled eventually at Rs.18,700.
Even in the futures market, the yellow metal touched Rs.18,750 for July 10 delivery, up nearly 2 percent, as global investors made a beeline for bullion in the wake of the euro crisis that has made investments in sovereign securities risky, analysts said.
‘The rise is because of the European crisis, as the perception of the investor community that gold is a safe bet,’ said Jagannadham Thunuguntla, the equities head for leading brokerage firm SMC Capital.
‘All the money chases gold. Till such time this fear over the European financial crisis looms large, we will see gold in much demand. There could be corrections, since the rise has been too fast. But the trend will be upward,’ Thunuguntla told IANS.
According to the London headquartered World Gold Council, which recently released its outlook for the remaining part of this year, the demand for the metal in India and China will continue to grow driven by jewellery demand in spite of high gold prices.
‘In the first quarter of 2010, India was the strongest-performing market as the total consumer demand surged 698 percent to 193.5 tonnes. In China, demand proved resilient, as demand increased 11 percent to 105.2 tonnes,’ said the council.
According to analysts, the surge Tuesday followed a warning by the European Central Bank Monday that euro zone banks faced up to $235 billion in potential loan losses due to the ongoing global financial crisis.
Gold prices have seen a rather steep upward swing since 2007, when the retail price of the metal per 10 gm was Rs.10,800. Since then the prices have risen at an average of as much as 35 percent.