Gold climbs to one-month high on investment demand

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Mumbai, May 21: Gold futures and spot prices have climbed to near one month high on Wednesday as investors switch to precious metals supported by higher crude oil prices and weaker dollar.

In Mumbai, standard gold price was moved up by Rs 180 to Rs 12,860 per 10 gram while MCX June contracts were up by Rs 124 at Rs 12,730 per 10 gram at 5 pm on Wednesday mainly on soaring crude oil and weak dollar against euro. A similar firm trend was noticed in silver as it spurted by Rs 680 to Rs 24,860 per kg.

NYMEX gold for June delivery shot up $19 to $925 an ounce, its highest since April 23. On the other hand, NYMEX crude oil July contracts surged to a lifetime high of $130.28.

The weak dollar against the euro has also supported the rise in prices.

“Gold prices are moving up on the back of high crude oil and weakening dollar against euro. Physical demand for yellow metal is very low but steady investment demand will continue to drive the price,” a local dealer said.

According to latest report released by the World Gold Council (WGC), purchases for jewellery and investment fell 50% in main consumer India due to high prices, but purchases from China and Russia rose 15% and 9%, respectively, in the first quarter of 2008. Global demand for gold fell 16% year-on-year to 701 tonne in the first quarter of 2008, the lowest quarterly figure in five years, as bullion rallied to hit a record above $1,000 an ounce.