Gold price looks to Rs 30,000 per tola, set to shatter all records

Gold is likely to rise up to Rs 30,000 per tola (11.664 gram), hurting the domestic trade. Gold traders are a worried lot as the price is gaining every day, pinching their trade in the wedding season.
"Today, it broke all records and was traded at Rs 29,160 per tola in the domestic market," said Tej Ratna Shakya, president of Nepal Gold and Silver Dealers' Association (NEGOSIDA). Interestingly, silver also jumped to Rs 414 per tola today.
"The weak dollar against the Japanese yen and Euro and poorer performance of global share markets have pushed up the gold price in the international market apart from weak rupee against the dollar at home," he said adding that the price of gold in the international market also is looking to go up to $1000 per ounce. Today, it was around $965 per ounce.
"Speculative market players have also contributed to the hike in gold price," Shakya said. Gold is unique because it is both a commodity and a monetary asset and thus a safe haven for investors. "Gold is seen as a hedge against inflation; while its real value can vary in the short term, its purchasing power has remained stable over centuries," said Shakya.
Today, very little gold was traded, at Rs 25,000 per 10 gram while silver was traded at Rs 355 per 10 gram.
According to World Gold Council's Gold Demand Trends, identifiable gold demand in tonnage terms rose by four per cent on previous year levels to 3,659 tonnes. This year as a whole, the gold price averaged $872, up by 25 per cent from $695 in 2007.
Similarly, global demand for jewellery was also up by 11 per cent in dollar terms at almost $60 billion for 2008 against 2007.
Investors around the world have recognised the benefits of holding back gold during such a time of unprecedented global financial crisis, recession and the spectre of future inflation. Gold has again proven its core investment qualities as a store of value, safe haven and portfolio diversifier. Naturally, this has struck a chord with nervous investors.
Total demand in India, the world's largest gold market, in the fourth quarter of 2008 was up by 84 per cent in tonnage terms, led by a very strong 107 per cent rise in jewellery demand, underpinned by investment attributes of gold.
Similarly, total gold demand in Greater China in Q4 of 2008 was resilient against the global turmoil. Total off-take was up by 21 per cent on the same period last year, with investment the main contributor to growth but jewellery demand also holding up well.