Precious metals seemed to be on fire this week. Gold reaching
its life time high of Rs. 31,300 (999 purity per 10gm) in the physical market
where as silver and platinum reached Rs. 57,000(per kg) and Rs. 29,600
(per 10gm) respectively.
Bright chances of another round of QE3 led to sharp rises in
gold and silver prices where as labour unrest in Lonmin’s mine in South Africa
resulted in the platinum volatility.
In the international market, gold rose to a 16-week high to USD 1,665.09 an ounce and silver gained by 2.5 percent to USD 30.57 an ounce
Rise in international gold prices affected the domestic
prices too. Internationally, gold reached its highest level in the past three
months. Rising gold rates along with the appreciation of the rupee against the
dollar led to this huge leap. Indian rupee appreciated to 55.41 against the US
dollar on Thursday.
Minutes of the FOMC meeting resulted in rallying of gold and
silver. The FOMC meet brightened the chances of another quantitative easing
plan. US economy has been growing but at a very slow pace. The homes sales
report and jobless claims report didn’t seem to be much positive. These stats
will strongly affect bullion prices.
Moreover Central bank has been buying 150 tonnes of gold.
Along with his there is huge SPDR ETF buying too.
Gold has always been considered as a safe haven asset and
during these times of uncertainty investors are turning to gold to be on the
safer side. Where traders and stockists are concerned, they too have started
piling up their stocks ahead of the biggest festive and marriage seasons of the
year (September- December) in India.
Looking at platinum, this metal has also shown great
volatility in this week. The unrest at Lonmins mine in South Africa has spread
to two other mines. Platinum prices continued to soar due to concerns of supply
trouble after 44 people died during strikes at a pit owned by Lonmin.
About a fifth of global platinum production is idled in South
Africa resulting in supply shortage and soaring prices.
It seems likely that these protests will affect the other
precious metals too including the gold mining sector.
Outlook for gold is bullish with the yellow metal is expected
to reach $ 1800 an ounce by September end.
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