Tuesday February 17, 2009

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By Sam Devraj  ( Assistant Editor )

Indian gold hits record levels

GOLD buyers in India ignored the wedding season and postponed purchases as they grappled with never-before prices, traders and dealers said.

The flow of scrap gold gained more momentum, they added.

"Nobody is interested in buying." said Daman Prakash, director with Chennai-based wholesaler, MNC Bullion, adding that inventories in warehouses have piled up.

The benchmark April gold contract was 2.72 per cent higher at Rs15,107 (£214) per 10 grams at 1:40 pm, after hitting an all-time high of Rs15,135 (£220) per 10 grams earlier on safe haven purchases and a weak rupee.

Indian gold is expected to coast to Rs16,000 (£228) after last week's stretch of record-making highs, as heavy safe-haven buying overseas showed the peak has yet to come.

"People have lost interest in gold at such high prices," said Pinakin Vyaas chief manager - treasury with IndusInd Bank.

India gold purchases have slowed to a trickle ever since prices moved above the $900-mark (£635) internationally and Rs13,500 (£192) locally.

Gold purchases by India are on course to fall for the second month in a row with no imports so far in February because of high prices, the head of a trade body said on Friday.

SCRAP GOLD FLOW INTENSIFIES

The flow of scrap gold intensified after a two-day lull as prices rose above the psychological Rs15,000-mark.

"People who were supposed to buy are selling in the middle of the wedding season," said IndusInd's Vyaas.

"There are people standing outside to sell old gold," said Kapil Kumar Chokshi, a partner at Chokshi Arvind Jewellers in Mumbai's Zaveri Bazaar. "We are expecting (more such) people to arrive by this evening," he said.

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