Gold v/s Silver

Gold prices spurted to an all-time high of Rs 14,110 in early trade on the bullion market on Saturday on hectic stockists buying triggered
by sharp rise in global markets.

Silver also advanced further on persistent industrial demand on the back of higher international advices.

Standard gold (99.5 purity) rallied by Rs 345 per ten grams to open at an all-time peak of Rs 14,110 from yesterday's closing level of Rs 13,765. It earlier touched a high of Rs 14,105 on October ten, 2008.

Pure gold (99.9 purity) also shot up by Rs 350 per ten grams to Rs 14,170 from Rs 13,820 yesterday.

Silver ready (.999 fineness) rose by Rs 425 per kilo to Rs 19,480 from Rs 19,055.

Gold prices rose to a three-month high, climbing past USD 900 an ounce in both New York and London for the first time since October, as global equity markets tumbled, boosting demand for a safe harbor.

Gold futures for February delivery climbed USD 37, or 4.3 per cent, to USD 895.80 an ounce on the Comex Division of the New York Mercantile Exchange, the biggest gain since December 10. Earlier, the price reached USD 903.80, the highest for a most-active contract since October 10.

Silver futures for March delivery rose 57.5 cents to USD 11.94 an ounce.

Gold imports in India for 2008 dipped by almost 47% to 402 tonnes

"High prices have been the culprit this year as gold imports in India for 2008 dipped by almost 47% to 402 tonnes. The December 2008 gold imports stood at only 3 tonnes versus the 16 tonnes in December 2007," National Commodities Exchange of India's (NCDEX) Economist, Manasee S Gokhale, said in a report.

The economic turmoil has also hit the demand for luxury goods and hence the demand for jewellery has fallen considerably.

'Buying remained dull and prices remained high on global cues', Gokhale said.

Although the gold market fundamentals look excellent, investors have been struggling for survival and in this attempt have sold even their gold and silver positions. As a result, gold prices have dropped continuously till they hit the $680/troy ounce levels. As compared to equities or other commodities, the percentage fall in gold prices has been lesser, Gokhale said.

Commenting on the performance of gold price in 2009, Gokhale said that if the downward scenario continues and there is deflation, gold would do well as asset value drops because of fear and distrust in the system.

"What appeared to be excellent market conditions in 2008 have all vanished into thin air and staring us in the face is the growing uncertainty created by the financial crisis," Gokhale said.