Gold prices hit record high, deter buyers

Mumbai, Jun 2: Bullion prices in India touched a record high of 398.42 dollars for ten grams on Tuesday, Jun 2 and closed at 398.11 dollars.

The skyrocketing rates of gold have severely constrained the budget of customers during the ongoing wedding season.

Gold futures on the Multi Commodity Exchange (MCX) were trading 1.88 percent higher, tracking strong overseas markets, where safe haven buying supported the yellow metal.

"Prices have soared a lot. They are no more worth it for buying. But we have to buy it in times of need, though rather than buying more we buy less now. That is why people are buying now," said Ashwini Bhinde, a customer.

Jewellery shop owners believe that the prices will continue to soar and touch almost 467.63 dollars by November during Deewali.

Ashwini Pethe, owner of a jewellery showroom said that the people are buying gold in the raw form rather than ornaments for future consumption and also reckoning its value in appreciation.

However, according to the World Gold Council, the demand for gold is expected to be strong during 2010 due to increasing interest for jewellery in India and China irrespective of high local prices.

"It (Gold) depends on the international market rate. The rates are fixed in London, although the maximum consumption is in India and China. China is purchasing gold to improve their capital while in India most of the people are purchasing gold for the ornaments.That is the basic difference between the two countries. Out of 100 per cent, say almost 30 per cent gold consumption is done by India," Pethe said.

ANI