India’s gold buying pushes metal to new high
NEW YORK — Gold prices surged to a new high Tuesday on news that India’s central bank bought $6.7 billion worth of gold from the International Monetary Fund.
December gold jumped as high as $1,087, before settling up $30.90, or 2.9 percent, at $1,084.90 an ounce on the New York Mercantile Exchange. Prices are now up 22.7 percent for the year.
India’s purchase of about 200 metric tons of gold was a strong indication of the investment demand for the precious metal.
“To see a central bank buy at this kind of level shows there are going to be a lot of other buyers out there,” said David Beahm, vice president of economic research at Blanchard & Co., a precious metals investment firm.
“It signals that there are people out there that think the price is going to continue to go up,” he said. Beahm sees gold rising to as high as $1,150 an ounce by the end of this year.
India, along with China and Russia, have indicated interest in buying gold as a way to diversify their holdings in dollar-denominated assets. The U.S. dollar has weakened considerably this year amid record-low interest rates, which have encouraged investors to look for higher-yielding assets, like stocks and commodities. Buying gold is seen as a way to hedge against a weaker dollar and the threat of inflation.
On Tuesday, gold rose even as the dollar moved higher against other major currencies in early trading, breaking away from its traditional inverse relationship with the U.S. currency. The dollar later retreated.
The IMF has set out to sell about 400 metric tons of gold this year in an effort to shore up its finances and increase lending to developing countries. India’s purchase represents about half of that amount. IMF is the world’s third largest holder of gold, after the United States and Germany.
Other precious metals followed gold higher. December silver soared 74 cents, or 4.5 percent, to $17.18 an ounce, while December platinum rallied $18.10 to $1,353 an ounce.
December copper futures rose 1.1 cents to $2.956 a pound.
Energy prices also rose Tuesday. Light, sweet crude for December delivery rose $1.47 to $79.60 a barrel.
Gasoline futures added 1.01 cent to $2.0004 a gallon, while heating oil futures gained 2.73 cents to $20.733 a gallon.
Many investors are eager to hear what the Federal Reserve has to say about the economy and its outlook on interest rates at the end of a two-day policy meeting on Wednesday. If the Fed were to give a more upbeat outlook on the economy and signal that it may raise interest rates sooner rather than later to ward off inflation, the dollar could rise, potentially crimping foreign demand for commodities and hurting prices. Dollar-denominated commodities become more expensive for foreign buyers when the greenback rises.
But the dollar could weaken further and thereby boost commodities prices if the Fed maintains its stance that it plans to keep interest rates low for the foreseeable future.
On the Chicago Board of Trade, December wheat futures rose 1 cent to $5.1575 a bushel, while corn for December delivery rose 7.75 cents to $3.09 a bushel.
January soybeans rose 12.5 cents to $10.105 a bushel.
Other soft commodities were mixed. Sugar and cocoa rose, while coffee fell.
Related News
IMF sells 200 metric tons of gold worth $6.7 billion to India's central bankNovember 3rd, 2009 IMF sells gold to India's central bankWASHINGTON — The International Monetary Fund has sold 200 metric tons of gold worth $6.7 billion to India's central bank as part of an effort to shore up IMF finances and increase low-cost lending to developing countries. The amount represents almost half the total sales volume of 403.3 metric tons approved by the IMF in September, the lending organization said Monday, a decision anticipated for more than a year and discounted by gold markets.
Barrick Gold reports 3rd-qtr loss on hedging charges; adjusted earnings beat streetOctober 29th, 2009 Barrick Gold posts 3Q loss on hedging chargesNEW YORK — Barrick Gold Corp. on Thursday reported a third-quarter loss of $5.35 billion on a huge charge related to the unwinding of gold hedges which had committed it to sell gold at prices that now seem unusually cheap.
Harrods department store goes further upmarket, selling pricey gold bars to its shoppersOctober 15th, 2009 Harrods adds gold bars to its luxurious imageLONDON — Glittering bait for the well-heeled shopper: Harrods department store has added gold bars to its merchandise line. The store announced Thursday that it has joined with Swiss refiner Produits Artistiques Metaux Precieux to offer gold bars weighing 27.5 pounds (12.5 kilograms).
On Dhanteras, it's gold that glitters in DelhiOctober 15th, 2009 NEW DELHI - Rising gold prices had kept buyers away from stores for a long time, but shopkeepers here have a reason to celebrate, as sales have shown an upward curve on Dhanteras, two days before Diwali when people traditionally buy gold and utensils. Our shops are packed with customers today, who are going in for gold more than other things, Varun Chawla, the spokesperson of Nathumal Jewellers, told IANS Thursday.
Barrick buys 70 percent stake in Xstrata gold and copper properties in Chile for $465 millionOctober 12th, 2009 Barrick buys Xstrata assets in Chile for $465MNEW YORK — Barrick Gold is snapping up mining assets with its excess cash, inking a $465 million cash deal to buy a gold and copper project from a unit of Xstrata. The Toronto-based company will acquire a 70 percent interest in a Xstrata Plc's El Morrow project, an advanced gold-copper project located in the Atacama Region in Chile.
Soaring gold prices worry Kerala jewelers, customersSeptember 10th, 2009 KOCHI - With gold prices soaring across the country, bullion merchants, jewellers and even customers are a worried lot in Kerala. The disappointment looms large particularly in the context of the ensuing festival season.
Gold prices cross 1,000 dollars an ounceSeptember 8th, 2009 NEW DELHI - For the first time since February, gold prices crossed 1,000 dollars an ounce on Tuesday, as investors sought a safe haven due to the dollar's weakness and worries about the sustainability of the global economic recovery. India's gold demand normally rises between August and October, when consumers buy bullion for auspicious reasons to celebrate major festivals such as Dussera, Diwali and Dhanteras.
Canada's Eldorado Gold to acquire rest of Sino Gold Mining for $1.8B in stockAugust 26th, 2009 Eldorado to acquire rest of Sino GoldVANCOUVER, British Columbia — Canada's Eldorado Gold Corp. says it has agreed to buy all remaining shares of Australia's Sino Gold Mining Ltd.
Gold prices drop 2 percent as dollar gains ground against other currenciesJune 3rd, 2009 Gold prices fall sharply as dollar reboundsNEW YORK — Gold prices have fallen sharply as the dollar rebounds against the euro and the British pound. The dollar's gains come ahead of Thursday's interest rate decisions from the European Central Bank and the Bank of England.
Gold prices inch higher as dollar shows more weakness, stocks retreatMay 8th, 2009 Gold prices inch higher as dollar weakensNEW YORK — Gold prices are slightly higher as the dollar shows more weakness and stocks tumble on Wall Street. Energy and agriculture futures are also slightly higher.
Gold prices slide further, close below $900 an ounce as swine flu fears batter commoditiesApril 28th, 2009 Gold prices fall, close below $900 an ounceNEW YORK — Gold prices are lower as fears of a global swine flu pandemic rattle commodities markets. Oil and other metals have also fallen, while agriculture futures are up slightly.
Gold closes above $900 for first time in weeks, rising for 2nd straight dayApril 23rd, 2009 Gold prices rise for 2nd straight dayNEW YORK — Gold prices are higher, closing above $900 for the first time in three weeks as investors move some money back into the safe-haven investment while stocks waver on Wall Street. Oil and grain prices are also up slightly.
Gold prices dip as remarks from Treasury Secretary Geithner spur buying on Wall StreetApril 21st, 2009 Gold prices dip as stocks move higherNEW YORK — Gold prices are slightly lower as stocks gain ground. Oil prices are flat, while grain prices are up.
Gold futures hover around record highMarch 3rd, 2009 MUMBAI - Gold was hovering around Rs.16,040 per 10 grams in intra-day trade Monday, an all-time trading price high, with consumers avoiding buying new gold and preferring to exchange old gold for new. Around 1:40 p.m., gold's April futures prices touched a high of Rs.15,968 per 10 grams at the Multi Commodity Exchange as the rupee continued to reign at over Rs.50 to the dollar.
Gold price reaches record highFebruary 16th, 2009 MUMBAI - Gold prices Tuesday zoomed Rs.360 to a record high of Rs.15,200 per ten grams in Indian bullion market on strong global cues and support from a weak rupee. The yellow metal continued its bull run at international markets also as investors kept buying gold amid worsening global economic outlook.
Loading ...