India’s gold price stabilised yesterday, though the Indian wedding season is nearing its end and jewellers are attempting to run down their inventory. It is notable that silver demand is still consistently high, however, with the demand dynamics in the Indian gold and silver markets working in opposite directions. In contrast to gold, Indian metal and jewellery traders are stocking up on the white metal in order to satisfy the consistently high physical demand for silver. Meanwhile, Pakistan’s gold price reached a new record high at $1,850 rupees per Tola (11.66 grams) on Thursday.
While gold of 99.9% purity declined by 25 rupees to 22,655 rupees in yesterday’s trading session, the silver price increased by 400 rupees to 55,100 rupees per kilogram. Silver coin prices also moved higher yesterday. Their price range climbed by 1,000 rupees to 61,000 rupees for buying and 62,000 rupees for selling 100 pieces. Exchange traders said that India’s demand for silver immediately increased after the price for the white metal had gained ground at the world market again. In contrast, local traders’ gold inventories are at a high level, and the demand for the yellow metal is falling. With the wedding season ending, potential buyers are holding out for price dips.
As Sarafa Association Peshawar reported yesterday, Pakistan’s gold price has increased by 150 rupees in the past seven days and reached a new record high of 51,850 rupees yesterday. Sarafa Association added that the rising external value of the US dollar against the rupee has been responsible for the soaring gold price.
The gold price increased to $1,542.70 per ounce at the world market during yesterday’s trading session, with the silver price also pulled higher in gold’s slipstream. In today’s early morning hours the white metal quoted at $37.70 per ounce before profit-taking set in, causing the price to swing back to $37.20. Yesterday’s ECB meeting did not catch the markets flat-footed but matched the expectations of most capital investors. The ECB decided to hold their key interest rate steady at 1.25% in June, but ECB president Jean-Claude Trichet clearly hinted in the press conference after the meeting that an interest rate hike in July is likely – stating that "strong vigilance" is needed over future inflationary pressures. Market observers stated after the ECB meeting that the greenback could remain under sales pressure against the euro and other major currencies in the next few months, since the potential for rising eurozone interest rates would lure investor capital into the region.
Miguel Perez-Santalla, vice president of sales with the German precious metals trading group Heraeus, said that gold was well supported by the ongoing sovereign debt crisis in the eurozone, while a strengthening euro against the dollar could also encourage more investors from around the world to dump their dollars for precious metals
