Gold rallies further, silver recovers

Gold prices flared up for the third consecutive day on the bullion market here today on persistent buying by stockists on the back of higher global cues.

Silver prices also recovered sharply on renewed industrial demand.

Gold prices held near two-month high above USD 950 an ounce in Europe today, consolidating after the previous session's two per cent rise, as investors bought the metal as a hedge against the weak dollar and financial risk.

Spot gold was quoted at USD 954.10 an ounce as against USD 953.40 an ounce late in New York on Thursday after reaching a high of USD 955.95 an ounce level for the first time since late March.

In the domestic market, standard gold (99.5 purity) rose further by Rs 105 per ten grams to Rs 14,540 from the yesterday's closing of Rs 14,435.

Pure gold (99.9 purity) also hardened by Rs 110 per ten grams to Rs 14,610 from Rs 14,500 previously.

Silver ready (.999 fineness) shot up by Rs 280 per kilo to Rs 22,770 from Rs 22,490.

Source - Economic Time

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Safe bet: Gold shines with 26% returns

Even as the current economic conditions have dwindled returns from other forms of investment, Indian housewives who have been passionate gold enthusiasts and investors in the yellow metal are reaping the rewards.

Gold has yielded an annual average return of 26% in the last decade, according to the World Gold Council (WGC).

In a new report, WGC has said that the annual average gold price, in Indian rupees, has grown year on year. The first quarter of 2009 has also provided an impetus. Gold has provided a positive return of 17% when compared to the average annual price of Rs 12,147 for 2008.

The average price for Q1 of 2009 was Rs 14,180. The first quarter of 2009 also witnessed the price of gold peaking to an all time high of Rs 15,780 per 10 gms on February 24, 2009.

In 1999, when the price of 10gm of gold was Rs 3,850, the metal gained 216% in absolute returns as compared to 2008 prices. This pegs the annual return on investment (ROI) at 24%. Similarly, when 10gm of gold was priced at Rs 4,106 in 2001, absolute returns was 196% as compared to the 2008 price, registering an annual ROI of 28%.

In 2006, when 10gm of gold was Rs 8,791 aboslute returns was 38% as compared to 2008 prices. In 2008, the yellow metal touched Rs 12,147.

Commenting on gold's sustained upward trend for a decade, World Gold Council MD Ajay Mitra said, "The Indian housewife has turned out to be the best fund manager. Gold jewellery has been treasured, sought after and popular since the beginning of Indian history. The presence of a safe asset like gold in an investment portfolio ensures assured returns, which further adds to its appeal.''

The Gold Survey 2009 predicts that in the coming months, gold could easily re-attain the $1,000 mark, with an expectation of crossing the $1,100 barrier. If the current trend continues, Indian consumers could possibly witness a further appreciation of around 24%, adds the report. - ET

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GOLD will never loos its lust it seems. GOLD hits record hight of 14,407

Gold prices reached its all-time high on Friday deterring buyers from fresh purchases in the midst of a wedding season, and consumers cashed in on the price rise by selling scrap gold, traders said.

"There is no demand, but there is scrap coming in," said Prithviraj Kothari, director with Riddhisiddhi Bullions in Mumbai.

Gold futures on the continuation chart on the Multi Commodity Exchange touched a high of 14,407 rupees per 10 grams at 2:14 p.m.

The price gap between the local gold and bank gold widened due to lack of demand and profit taking by investors.

Traders said consumers took advantage of near-record prices by selling scrap gold, thereby limiting demand for new bars.

Buyers are awaiting a fall to purchase gold bars, said Kishore Zaveri, director, Zaveri and Co. in Ahmedabad, a retail gold jeweller. - ET

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Gold prices jump on high demand.

Gold prices jumped by Rs240 to Rs13,240 per 10 gram on the bullion market on Tuesday on emergence of buying by retailers and jewellery fabricators to meet the demand for Christmas and New year celebrations.

In a similar fashion, silver also rose by Rs30 at Rs17,650 per kg.

Standard gold and ornaments spurted by Rs240 each to Rs13,240 and Rs13,090 per 10 gram respectively.

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Gold may top $1,000 in 3 years: Morgan Stanley.

Gold may jump above $1,000 an ounce in 2011 as global mine output drops, mining costs rise and demand increases, Morgan Stanley said. Mining production actually peaked in 2001 and has since been declining, the bank''s commodity analyst Hussein Allidina said in Singapore. "When I look at the demand side, as income growth accelerates, the consumption of gold for jewellery purposes increases.

Gold climbed more than double in the past six years and reached a record $1,032.70 an ounce on March 17 as the dollar slumped and oil advanced, increasing concerns that inflation would accelerate. In the past eight months, the precious metal plunged 31 per cent as the dollar rallied, oil collapsed and the global credit crisis pushed the world toward a recession.

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The GOLD Rush.

The James Bond movie ‘Diamonds are Forever’ was a memorable one.

Those who invested in Gold since the last calendar quarter of 2007 even as the equity markets in India rolled on like an unstoppable juggernaut, too would have found the experience memorable.

To cut to facts, Gold prices ascended vertically even as equity markets the world over tanked and even topped the USD 1000 mark for a while. During this period, the yellow metal which has historically been used as a hedge against rising inflation and falling prices of other asset classes has been shining brightly.

The proverbial million dollar question now is …. Is this price level for gold sustainable ?

The primary reason for higher gold prices can be attributed to the weakening of the US economy which has led to further depreciation of the dollar as compared to other major currencies. Further, falling equity markets throughout the globe has made investors look for safer avenues of investment. Rising crude prices too contributed to the upswing in the price of this precious metal.

For now, it is well within the realm of possibility that in the event of another equity meltdown which seems likely, gold prices may again ascend towards the USD 1000 mark. Nevertheless short-term investors should tread cautiously in the near term as like all other class of investments there is always a risk attached, given that gold prices too have turned very volatile.

However, in the long-term, given the rising global demand for gold against limited known sources of supply, coupled with the host of factors mentioned above and last but not the least, compounded by the spectre of terror strikes across the globe, chances are, Gold remains a decent bet as the Asset class of choice on the Risk-Reward scales.

Gold, thus, to my mind, is Forever.

Happy Investing.

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Investment Idea - GOLD.

GOLD is one favourate since good old days.
It is also know as international currency.
In short its listed every where , You can sell gold in any damn part of the world.
For an instance I buy gold from South Africa and sell in India still I get the same value for my money.
Plus points of GOLD.
The main advantage in GOLD is that it is highly liquid in nature.
It is in positive trend.
Made a new life high of 14 K last month.
Its festive time so chances to gold prices to bounce highly possible.

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Gold options point to $1,200 in rocky ride

Options traders are betting that gold will run toward $1,200 an ounce by year end, but it looks like they will have to sweat out some extremely choppy markets before seeing if the prediction pays off. Buying of cheap calls has been one of the strategies for gaining exposure to gold, which has been one of the few commodities to prosper as a safe haven during the scariest stock market rout in memory.

Call options confer the right but not an obligation to buy something, in this case the December gold futures contract, at a predetermined strike price and date. COMEX December $1,200 call options currently have 24,000 contracts of open interest, by far the most popular among all the different strike prices. The second highest were the $900 calls with 18,000 lots, followed by the $1,000 calls with 17,000 lots.
A put confers the right to sell something at a particular price and time. When heavy interest lines up at a particular strike price, it can indicate where the underlying market is headed, or at least where options traders think it is. The hedging by options desks to make sure they can sell or buy an instrument if the option is exercised can force the underlying market in the direction of the strike, especially as it nears expiration.

A relentless sell-off that pulled the US stock market down about 20 percent this week bolstered gold's status as a safe store in times of financial chaos, driving bullion $200 higher in just a month's time. "Gold is seen as something real to hold onto during times of panic," said Rob Kurzatkowski, futures analyst of optionsXpress in Chicago. Out-of-the-money call options, where the underlying price is well below the strike, are priced much cheaper than near the money calls. This signaled the price volatility of gold will likely stay at an elevated level in the near term, option traders said.

OUT-OF-THE-MONEY BARGAIN

Kurzatkowski said that the prices of near-the-money calls have been bid up due to increased volatility, prompting many investors to buy the cheaper December $1,200 calls as a way to profit from gold's upside potential. A single lot of December $1,200 call option costs $9.00, compared with $60 of the on-the-money December $900 call. The difference is due to gold's high implied volatility, a statistical measure of the expected magnitude of gold futures price movement given an option price.

"The volatility would suggest that the option premiums are pretty high," said David Rinehimer, director of Citi Futures Perspective in New York. The market's actual volatility was illustrated by gold's massive $108 swing on Friday that included a $65 loss. Kurzatkowski said he expected gold to rise to $1,000 soon should mounting fears on banks and a global recession continue to pummel the stock markets, but a sudden resurgence of the dollar could limit bullion's rally.
Source: - ET

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Investing In Gold.

People like the look of gold, and they'll do what they can to get it. Even though it costs more now, people still want it. If you're interested in investing in gold, do some research before you shell out the money for it.Here's some things you should know before you take that big, financial leap:In addition to gold coins, there are different ways that you can you can invest.You can use metals, mutual funds, mining company stock, or futures, as additional ways to make investments with gold. You can also invest in gold using bars, if you wish.You can get more information by going to a metal dealer. Or you can search online to find some reputable ones. If you are a first time investor, it might be better for you to visit a facility to speak with a dealer in person.If you have a lot of questions, you should write them down.Find out how long the dealer has been established. If they've been there a while, chances are they are very knowledgeable about what they do.You'll want to educate yourself before you visit with a dealer. That way, you'll have an idea of how investing in gold really works. You'll also find out if what the dealer is telling you lines up with your research.If you do decide to pursue this, you should also think about investing in gold stocks and funds. It's been proven that gold funds are a reliable choice to invest in. However, when you're dealing with stocks, you're dealing with a single entity. That means the gold stocks are not diversified and your investment isn't as reliable as gold funds.When you're trying to decide what you're going to purchase, don't be in a hurry to make a decision.Don't buy the first thing you see because you may regret the purchase later. All gold pieces are not easy to sell if you want to get rid of them.You can also purchase certificates as an alternate option. This for you, would solidify that you own a piece of gold.When researching about gold, find out how much it would be worth if it was kept polished and free of nicks and scrapes? What about if it's not so polished? More than likely, it won't be as much as the former. The better you maintain your gold, the better price you can get for it.Investing in gold futures is for those who can afford to take the risk.If you're just starting out and don't have the money to risk for it, then you should pass on this for now. With futures, you have to be certain that you can handle the volatility of this segment.Futures is considered a financial risk because you have to constantly figure out whether the price of gold will go up or down. Sometimes you may hit it on the head, other times you may not. If you get involved in this, you will have to either buy or sell for a certain price.The dependence on how much the gold is worth during that time determines how much money you will make.Investing in gold can be lucrative, but you have to know what you're doing when you get involved in it.

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