Gold Surges To Rs 13,560 On Strong Global Cues

Gold prices on March 17 reached its new peak of Rs 13,560 in the bullion market in New Delhi on brisk buying by stockists, sparked by strong global cues. A turmoil in all financial markets after all dollar-denominated commodities turned volatile by setting high and low record levels, diverted investors to park their funds in gold, considering it to be a safe investment during such crisis, traders said. The precious metal set record high peaks in all local as well as world bullion markets.

A remarkable rise in crude oil prices, weakening dollar, restricted inflow of foreign investors in emerging Asian stock markets left with no other option but to invest in gold, which surged to an all-time high of $1033 an ounce in overseas markets. Standard gold and ornaments registered hefty gains of Rs 360 each to Rs 13,560 and Rs 13,410 per ten grams respectively. Sovereign joined the rally and set an all-time high level of Rs 10,350 per piece of eight gram by adding Rs 200. In a similar fashion, silver ready attracted heavy stockists and industrial units buying after reports that it touched a 28-year high level in overseas markets. Silver ready rallied by Rs 1,050 to Rs 25,800 per kg and weekly-based delivery by Rs 620 to Rs 27,360 per kg. Silver coins too remained in keen demand and advanced by Rs 400 to Rs 27,300 for buying and Rs 27,400 for selling of 100 coins.

Gold Resumes At An All-Time High Of Rs 12,885

Gold prices resumed at an all-time high of Rs 12,885 in the bullion market here on March 7 on fresh stockists buying in view of rising trend in the global markets. Silver also crossed Rs 25,000-mark on good industrial demand. Some of the investors shifted their funds in bullion due to fall in equity market, traders said. Standard gold (99.5 purity) rose by Rs 300 per ten grams to Rs 12,885 from the Wednesday''s closing level of Rs 12,585. Pure gold (99.9 purity) also rose to Rs 12,940 from Rs 12,635 previously.

Silver ready (.999 fineness) shot up by Rs 1,000 per kilo to Rs 25,100 from Rs 24,100. In New York, gold futures roared to record highs and silver to a 27-year peak on Wednesday as crude skyrocketed following a decline in the US oil inventories, leaving the metals market focused on the possibility of hitting the long-talked-about level of $1,000 in gold.

Most-active April gold hit a life-of-contract high of $995.20 an ounce on the Comex division of the New York Mercantile Exchange, while May silver hit a contract high of $20.97 an ounce.

Inflation Up On Rising Food Prices

NEW DELHI: Wholesale price inflation inched up to a six-month high of 4.35% in the week ended February 9, compared to previous week level of 4.11%, on account of rise in prices of food articles, such as fruit & vegetables, pulses, condiments, and some manufactured products like imported edible oil, mustard oil and groundnut. Inflation was at 6.52% during the corresponding week in the year-ago period.

Experts opine that inflation will rise further in weeks to come on account of hike in fuel prices. Last week, the government had raised fuel prices by 4% to reduce the under-recoveries of oil marketing companies. Last year alone, the global crude prices surged by 56%. Crude crossed the $100 per barrel mark on February 20.

“The numbers are in line with expectations. Further, when the fuel price hike shows up in the inflation numbers from the next week, inflation would move up and could touch 5% level,” said Crisil principal economist D K Joshi.

Though inflation continues to be below RBI’s forecast of close to 5% for this fiscal, the apprehension of it again moving up had not subsided. Experts said this will restrain RBI from going in for a rate cut.

“Inflationary pressures are still lurking in the eocnomy as the prices of almost all commodities are expected to move up further due to demand-supply mismatch. Hence, a rate cut by RBI in the near term, seems unlikely,” said Standard Chartered bank economist Sucheta Mehta.

During the week under review, prices of arhar, fruits and vegetables went up by 3% each, while the prices of condiments & spices and fish marine surged by 2% each. Prices of Bajra and barley shot up by 1% each.

In a non food articles group gingelly seed, groundnut seeds were dearer by 9% and 2%. However, the prices of sunflower and raw wool declined by 6% and 3% respectively.

The index of manufactured products, accounting for 64% in the inflation basket, rose by 0.4% in the week. Among manufactured products, prices of gingelly oil, oil cakes and bran went up by 3% each, while rice bran oil, imported edible oil, and khandsari moved up by 2% each.

The index for fuel, power light and lubricant remained unchanged. Inflation figure for the week ended December 15, 2007 has been revised to 3.84% as from the provisional estimate of 3.45%, as wholesale price index finally stood at 216.4 points as against the earlier calculation of 215.6.

Inflation Rate Crosses 4% Mark

After a gap of about six months, the inflation rate once again crossed the four-per cent mark due to rising prices of cereals, salt and bakery products. Based on the movement in the Wholesale Price Index (WPI), the inflation rate moved up to 4.11 per cent for the week ended January 26 from 3.93 per cent recorded in the previous week. The previous high of 4.4 per cent was recorded for the week ended July 28, 2007, while the annual rate of inflation a year ago was 6.69 per cent. The Government has also revised the inflation rate for the week ended December 14, 2007, to 3.89 per cent from 3.75 per cent reported earlier. Among the items of common consumption, the wholesale price of salt moved by five per cent during the week, while maize, moong, wheat, bajra and bakery products also became dearer. Although the index that reflects the prices of fuel remained unchanged, thanks to the Government not affecting any hike in fuel prices, the manufactured items and minerals became costlier during the week. Price hike was witnessed also in the case of toilet soaps and industrial inputs like caustic soda, synthetic rubber, limestone and iron ore.

The inflation data point out that the index of food items (within the primary articles category) rose by 0.2 per cent over the previous week due to higher prices of maize (three per cent) and moong, wheat, spices and bajra (one per cent each). However, prices of barley declined by one per cent.

The index of non-food articles rose by 0.5 per cent due to increase in prices of cotton (two per cent), castor and groundnut seeds (one per cent each). The group index of minerals moved up by 2.1 per cent due to higher prices of gypsum (62 per cent), limestone (14 per cent), fire clay (10 per cent) and iron ore (one per cent).