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Buyers shift to silver as gold rises

This article was posted on Aug 20, 2011 and is filed under Market News

Traders to bet big on silver as correction in yellow metal is imminent.

As gold prices become costlier, and riskier at these very high levels, market players fear an imminent correction in it. This has tempted speculators and physical traders to bet big on silver.

At Zaveri Bazar here, bullion traders and makers of ornaments and artifacts have started booking silver to their capacity, pushing it to a premium of Rs 1,000-2,000 per kg on its cost of import. In Mumbai on Friday, gold was up by Rs 960 per 10g to Rs 27,750, while silver went up Rs 2,255 to Rs 63,800 per kg.

“The reason is obvious,” said Lalit Jagawat, proprietor of Nakoda Bullion, a leading bullion dealer. “Gold holds no potential for further return. Any correction in price would fetch losses to us, as the metal has already become unaffordable after setting a new high every alternate day for the past few months. Silver, comparatively, is under-bought. Hence, bullion traders are now mad towards silver.”

Gold hit the all-time high of Rs 27,950 per 10g in early afternoon trade here. Profit booking pulled it a little down to close the day at Rs 27,750 per 10g. In rupee and dollar terms, gold has risen 34.3 per cent and 31.4 per cent, respectively, since April 1, especially because of the sovereign debt crisis in the European Union and mounting concern that the US economy may slip back into recession. Gold hit its upward circuit of five per cent on MCX after the New York session opened on Friday. For more visit: Business Standard

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