Mumbai – 1st of January 2008. Indian gold is moving up and ended on a buoyant note for the year with gold futures traded close to an all time high of 850 USD per ounce amid a weakening US dollar and keen interest to conserve assets according to analysts.
Gold has always been traditionally seen as a valuable asset in India and this is looked at by some analysts as good benchmark for future trading in gold
"As the dollar has started weakening and there is risk aversion, gold is higher," commented K N Rahaman, senior analyst at Way 2 Wealth Securities Ltd.
"Everybody knows that in the beginning of January there could be fresh entrants in gold." The dollar was weaker against other major currencies on talks of interest rate cuts in the US.
A weaker dollar increases the appeal of gold which is more and more seen as a hedge against inflation.
Another analyst, T Gnanasekar, director at Commtrendz Research, said gold would remain range bound, "but as it is a thin market, anything can happen."
“The investor interest generated in gold is likely to continue and the bullish trend in the metal may gather momentum in January, 2008,” BN Vaidya and Associates’ chartered accountant Bhargava Vaidya said.
The open interest for the February gold on the Multi Commodity Exchange of India Ltd was at 14,162 lots, up from 13,967 in the previous session. Volume on Saturday was good at 1.117 kg.
February gold settled at $842.70 an ounce, up $10.9 on the Comex division of the New York Mercantile Exchange. Meanwhile, India’s gold output increased by 8.6% to 8.72 tonnes during the first seven months period ended November 2007.
Confidence in Indian gold moving up looks like to continue with investors expecting to turn a nice profit in the new year.