India Gold - Customer Zone - Reuters

COMMODITIES GOLD GOLD: REBOUNDS WILL RISK SHIVER BATTERED AVERSION ON JAPAN AFTER BY BANISH DEBT SHARPEST U.S. CREDIT DOWNGRADE CORRECTION LOSS DOWNGRADE SINCE DESPITE FEARS? MAY CORRECTION FEARS AUGUST 2011
India, whose appetite for gold dates back centuries, imported a record 958 tonnes in 2010 and a recent Reuters poll forecast
imports to fall by 12 percent in 2011. The Bombay Bullion Association's forecast in the poll was 950-1,000 tonnes.
Indians buy gold during festivals like Dhanteras and Deepavali, falling in October, because they consider them auspicious
times for gifts and investments. Kothari said though demand has been rising for gold, demand for jewellery is falling as more
and more people buy coins and bars.
"Two to three years back, 85 percent of gold consumption was in jewellery form. Now that has fallen to 70 percent. Investment
demand is continuously rising due to higher (jewellery) making charges and wastage (at the time of sale)," he said, adding in
coming years the shift towards investment will continue.
NO INCENTIVE FOR SCRAP SALES?
Despite record high prices, scrap sales are not rising in India and Kothari says they are unlikely to rise in the current scenario.
"I don't think scrap sales will rise because of higher prices. The equity market is not giving returns, property prices are steady ...
they can sell gold, but where will they invest their money after selling?" he said. "Now prices are going up and up only. So I
don't think Indians will sell old jewellery," he added.
International spot gold prices retreated from early record highs near $1,900 an ounce on Monday, as a rebound in stock markets
from last week's lows gathered pace, denting interest in so-called safe haven assets like bullion.
"I think gold could cross the $2,000 an ounce level, may rise to $2,200 by the end of 2011," Kothari said, given a loss of confidence
among investors in other asset classes.
"Interest rates are very low in the U.S. and Europe. Lots of speculative money is coming into the market. Everyone is talking
about gold, buying gold ... They are losing faith in other asset classes," he said. He added that prices could correct before
heading over $2,000 per ounce. "It may fall to $1,750 before rising to $2,000," he said, as people paused to take profits in the
metal.
Banks race to raise gold price forecasts
Aug 22 (Reuters) -
G old
prices hit a record high near $1,900 an ounce on Monday, boosted by hefty losses in stock markets in recent sessions
and speculation that a sluggish U.S. recovery could lead to a further round of quantitative easing.
Spot prices are up by about a third this year and are on track for their biggest quarterly gain in at least 25 years. The
rally has prompted a number of banks and trading houses to raise their gold price forecasts.
Below are recent price views for gold. Please note that dates given are those of the reports in which the forecasts appeared,
which may differ from the dates on which they were made.
A woman checks a gold waist belt inside a jewellery shop on the occasion of the Akshaya Tritiya festival in the southern Indian city of Hyderabad . REUTERS/Krishnendu
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