Date:16/05/2006 URL: http://www.thehindubusinessline.com/2006/05/16/stories/2006051600561200.htm

Back Gold market turns volatile

Dhimant Bhatt

Mumbai , May 15

The domestic spot and futures market in gold turned volatile on Monday as prices dropped in intra-day trade.

Standard gold spot prices fell nearly Rs 250 or 2.5 per cent to Rs 10,265 per 10 gm from the previous day while June futures contracts dipped Rs 500 or 4.75 per cent to trade around Rs 10,342 per 10 gm. During the day, traders turned sellers on reports of sharp fall in LME copper and gold prices.

"This correction was overdue and one should not panic," Mr Raghavan Sundararajan, an analyst with Kotak Commodity Services Ltd, said.

At MCX, gold June contracts were down sharply to Rs 10,166 per 10 gm from the day's high of Rs 10,672 on profit taking. Later, the contracts recovered slightly to Rs 10,342 per 10 gm, a local trader said. MCX silver July contracts were trading at Rs 20,380 per kg intra-day after touching a day's high of Rs 22,280 per kg.

"The futures market was volatile. Overall trading volume in bullion at MCX was good. Trading volume in gold was recorded at Rs 3,500 croreand silver at Rs 2,000 crore," an exchange official said.

In the Mumbai spot market, pure gold (99.99) was down Rs 250 at Rs 10,315 from previous close of Rs 10,565 per 10 gm. Silver (.999 fineness) price was down Rs 765 at Rs 20,785 from the previous close of Rs 21,550 a kg.