Even as year 2003 cam to an end, the rising trend in gold remained unabated on the bullion market in Mumbai when on December 30 pure gold zoomed further to close at a new record high of Rs 6,235 per ten gram due to sharp rise in the global prices.
Silver also maintained it steep upward march and shot up by Rs 100 per kilo to end at an all-time high of Rs 9,480 on firm London advices on the penultimate day of 2003.
In the Asian markets, gold shot up to near 7-year high of $416.50 per ounce on fears of a further fall in dollar against the euro, dealers said.
Both the precious metals broke all previous records during the fag-end of the current year.
Gold: As usual, the yellow metal dominated trading and silver followed suit. Pure gold (99.9 purity) came into the picture in February after trading in the traditional 10-tola (116.4 gram) gold bar came to a halt after import duty on gold bar weighing 10 gram was slashed to Rs 100 per gram from Rs 250 per gram. This reduction was not effective in 10-tola bar weighing 116.4 grams and traders found it non-profitable to trade in it.
Standard gold of 99.5 purity, mainly used for jewellery, however, continued to be traded with usual enthusiasm.
Price movement in India is mainly in line with the world trend and banks fix the day's prices at par with London fixing rates. In the international markets, various events, mainly the Iraq war, affected the sentiment and the yellow metal touched the year's highest level of $412 per ounce towards the end of the current year, which caused the domestic prices to zoom too. Incidentally the all-time high for gold in the global market was $445.50 per ounce recorded on February 5, 1996.
In domestic as well as international market, the first major rise in gold prices was seen on February 5 on fears that an attack on Iraq would result in a steep hike in oil prices.
Investors, fearing more meltdown in stock prices around the globe, started buying gold as a safe haven investment and prices moved to Rs 6,000 per 10 gram in Mumbai, the highest level achieved by the metal at that time.
However, prices started falling sharply as Indian investors started selling at higher price to book hefty profits. "Investors in India take full advantage of price variations as they buy gold when the international prices are low and book profit when the global prices go up," a leading bullion dealer said.
Another reason for the sharp fall was firming of the US dollar against major world currencies as well as firm stock prices, and gold touched the year's lowest level of Rs 5,265 per ten gram on July 4.
In September as the US dollar fell sharply against global currencies, specially euro, gold prices soared once again.
Amid widening trade deficit and fresh concern about imbalance in American economy, the US currency dropped sharply to 1.2300 dollar per euro on December 12.The falling trend in dollar continued and it touched all-time low against the euro (1.2488 dollar per euro) on December 23, showing a steep fall of about 10 per cent against the single European currency. It fell almost 16 per cent against the British sterling.
On November 27 pure gold zoomed past the historic Rs 6,000-level to close at Rs 6,005.
Thereafter, it never looked back and continued its steep rally touching an all-time high of Rs 6235 per ten gram.
During the year, gold prices appreciated by more than 15 per cent in the world market and about 10 per cent in the local market, dealers said.
Pure gold: Trading in this category started on March 10 when it was quoted at Rs 5,610 per ten gram. It also moved in a similar way as standard gold and after falling to a low of Rs 5,105, it shot up to touch an all-time high of Rs 6,210.
Ten-tola gold: Ten-tola (116.4 gram) gold, in brief 67-day trading, opened steady at Rs 65,850 and after shooting to an all-time high of Rs 70,300 on February 5, fell back to Rs 65,300 when trading stopped in this metal on March 8.
Silver: Silver movement was somewhat similar to gold as ready silver (.999 fineness) started the year on a steady note at Rs 8,065 and fell sharply to Rs 7,580 on June 30 following the news that photography major Kodak was slowly moving towards digital photography. Silver is widely used in the photo industry.
However, the low level was shortlived and the metal rebounded thereafter.
PTI