By Rob Corder and Reuters
Dowry gifts just got a lot more expensive as gold future prices hit record high.
India's trade buyers of gold left their money in their pocket on Thursday as the precious metal surged past the $1,000 per ounce price barrier for the first time in history.
Dealers looked set to wait out the price spike in the hope that there is a corrective dip around the corner, despite the ongoing strength of retail demand thanks to the current wedding season.
Gold jewellery forms an essential part of the dowry basket during the mid-January to May peak wedding period.
"The rates have gone up so fast that people are sure it will correct again," said Harshad Ajmera, proprietor of JJ Gold House in Kolkata.
A dealer in a private bank said there were buyers in the market owing to the ongoing wedding season, but they could afford to wait for lower prices.
"Yesterday, buyers waited for prices to touch $961, but the price reversed without going there," said the dealer.
Gold futures prices surged above $1,000 on doubts about the effectiveness of the US Federal Reserve's efforts to aid strained credit markets. Higher crude oil prices, as investors have rushed to commodities to hedge themselves against a softer dollar and inflation, also bucked up gold.
A wholesaler in Jaipur, Ajay Singh of Kiran Jewellers, said his clients, mainly jewellers, were willing to buy gold between $965 and $975.
Scrap sales have flooded the local market since gold started its rally in November, with the trade choosing the cheaper recycled gold over the imported metal.For all the latest retail news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.