Soaring gold prices spark investor interest

[LahoreEstate]

Saturday, February 21, 2009
By Faryal Najeeb

KARACHI: Rapidly escalating gold prices have once again sparked the interest of the common public and investors alike and dealers in the industry say that people are considering buying gold rather than selling the precious yellow metal as a form of long-term investment.

President All-Pakistan Supreme Council of Jewellers Association, Alhaj Haroon Rashid Chand said that the local market had expected gold to slide eventually as the global economy attempted to free itself from the crisis and recession.

However, the sudden and unexpected high demand for gold as a means of safe-haven not only surprised experts, but also helped its value to surge, he continued.

He said that Pakistan has an age-old tradition of buying property and gold as investments, though many others had also invested in shares and currencies. Chand said that those who believed in investing in gold had renewed their strength, whereas others who had earlier invested in stocks and currencies had also shifted to the precious yellow metal.

The gold expert, however, clarified that in no way did it mean that gold sales had suddenly hiked as people purchased either in small quantities or in the form of jewellery and not solid gold bars.

He said that trading had improved slightly in the past week and more importantly, no one was out in the market selling their investments or jewellery as usually seen when gold prices rise in the country.

Chand has predicted that gold would cross the Rs30,000 per tola barrier in the coming week or so as it has already touched the Rs29,000 mark. He said that as stocks continue to tumble and currencies depreciate in value, both local and foreign investors are focusing on gold which has pushed its value sharply.

An investor who had purchased gold some months earlier as a means of making profits said that he had done so as he had surplus money that he could invest.

He said that during that time both stocks and banks had been extremely sensitive with wild rumours creating panic amongst the common public.

He therefore decided to buy gold as it seemed to be the safest means of investment at the time and also continuously fluctuating prices had offered him the deal that he could earn his profits rather quickly.

“Now, the time seems to be right and if gold crosses the Rs30,000 mark then I will sell my investment to earn the profits I had aimed for and then re-invest further into more gold,” he commented.

On the other hand, a short survey of gold shops in the city also led to the conclusion that while consumers had not yet returned to the markets, many were alarmed at the rising gold prices, and were considering purchasing the precious metal from now before prices soared further.

Dealers, nevertheless, did say that people had not returned to the market to sell their old jewellery as the usual trend goes, which suggests that either they are hanging on to their gold articles as a means of long term investment, or waiting for the yellow metal to hike further before they let go of their jewellery.

http://www.thenews.com.pk/daily_detail.asp?id=163668