The yellow metal was positioned nicely with the OTC options expiry on Wednesday. With news abounding about Australian buying, it seemed that gold would breach the $300 per ounce mark even before the auction. But with the US markets being closed for four days on account of Thanksgiving, markets elsewhere went silent.

The sentiment ignored the sale of gold estimated at $200 million by the Bank of Jordan as well as a third quarter report on golddemand trends by the World Gold Council (WGC). Though technical chartists view gold's prospects as positive, the yellow metal must be wary. With the Dow near the 11,000 mark and the dollar stronger against the euro but weaker against the yen, there are mixed signals for gold.

Side by side with gold, platinum put its foot on the gas as it zoomed yet again towards a two-year high of $457 per ounce on news that Russian exports would be delayed till 2000. In sympathy, palladium too was near the $400 per ounce mark, even though there were no problems on the export front.

Silver seems to be in no man's land, barely managing to remain in tune at 520 cents per ounce. The white metal had no impact of China's liberalisation of its domestic silver markets.

Friday saw gold at $296.85 per ounce and silver at 519.75 cents per ounce (gold and silver, London, Friday afternoon fixed).

The local bullion markets appear not to have taken cognisance of the 400 kg of gold garnered in the first week of the SBI Gold DepositScheme. Standard gold rose from Rs 4,620 per 10 gms to Rs 4,665 before closing at Rs 4,660, in tune with the international trend. Likewise, .999 silver too followed the same pattern as it moved up from Rs 8,010 per kg to Rs 8,145, only to end the week at Rs 8,120 (gold and silver, Mumbai, Saturday prices).

Meanwhile, the Union finance minister set the ball rolling recently on rationalising sales tax at the state chief ministers meet in Delhi.

The meeting also discussed a definite time frame for introduction of VAT (value added tax). Hopefully, octroi will also figure in the discussions. The bullion trade, particularly from Maharashtra, will watch the outcome of these deliberations with keen interest. Mumbai's bullion trade has lost heavily due to the lopsided sales-tax and octroi levied by successive state governments.

This once premier bullion city (particularly gold) is now just a ghostly shadow of itself. The bullion trade has virtually left the city for neighbouring Gujarat (Ahmedabad), where thebusiness environment is more conducive for the trade. In fact, recently a Mumbai-based company set up a mammoth unit there to manufacture gold jewellry up for those very reasons. Will the rationalisation in sales tax, octroi, etc., revitalise the bullion trade in the city? Or is it too late for the bullion trade to turn back now?