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Journalism of Courage
Gold prices soared to new peaks on Tuesday, fuelled by investors keen for a secure asset as war fears mounted on the India-Pakistan border. The gains crowned a winning streak that has taken gold 14 per cent higher since the start of this year. Gold appears to have returned as a relatively safe investment against a background of continuing political and economic jitters.
In Mumbai, gold prices flared up further on the bullion market on persistent heavy stockist buying, triggered by the ongoing border tension and a higher price trend in overseas markets. Standard gold shot up by Rs 55 per ten grams to Rs 5,290 from the overnight closing levels of Rs 5,235 after war fears fuelled renewed heavy demand for the yellow metal, dealers said. Ten-tola gold bar (.999 purity) also rose to Rs 62,000 from Rs 61,500. Analysts said the metal should now have increased prospects for further short-term price gains.
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Stocks overcome resistance
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MUMBAI: Stocks, however, overcame early resistance and made a partial turnaround aiding the Sensex recover most of its initial losses in volatile activity on BSE amidst short coverings by punters as well as fresh purchases by institutional investors. Sensex which fell to the intra-day low of 3144.18 at the outset due to a fresh slide in share values following a tough talk by Prime Minister Atal Behari Vajpayee. Later, it bounced back and stabilised at around overnight closing levels before ending at 3175.49 as against yesterday’s close of 3186.53, netting a fall of 11.04 points. (ENS) |
Ready silver (.999 fineness) also moved up by Rs 30 per kilo to Rs 8,240 from Rs 8,210. Bullion buyers in India have turned extremely cautious with gold prices rising over the past few days on fears of war on the north-western border. This cautiousness has resulted in the daily offtake of the ten-tola (TT) bars plunging to around 1,500 from over 6,000-7,000 till last week, sources said.
Gold’s reputation as a refuge for cash was also recognised after US vice-president Dick Cheney said on Sunday that another attack against the United States was a near certainty.
Spot gold prices ended European trading at $316.20/316.70 a troy ounce, its firmest point in 27 months and gaining from late European levels of $ 312.40/312.90 on Monday. ANZ’s Hillyard said he saw gold prices rising to $ 325, while Ross Norman, analyst at TheBullionDesk.com, saw gold targeting $320 and possibly $340 in the next six weeks.
“Investors believe gold is becoming a viable asset. In this environment gold certainly has something going for it,” said Peter Hillyard, senior manager at London’s ANZ Investment Bank. “With the funds continuing to believe in the yellow metal and the dollar appearing weak, the price looks set to test resistance around $320,” said Standard Bank in London. This week’s dollar fall to its lowest against key currencies in 2002—it hit seven-month lows against the euro and five-month lows against the yen on Monday—has boosted gold.
“There are golden smiles all around once again as the noblest of metals has left the bears choking on the dust of a renewed bull run,” analyst Nick Moore of broker JP Morgan said.
