Global meltdown causes rush for gold

The host of problems in the global economy, like the subprime meltdown, the financial crisis downturn in the equity markets, along with commodity prices still remaining at high levels, are all forcing investors to rediscover the lustre in gold.
According to a recent report by team of analysts headed by Kevin Norrish from Barclays Capital, investing in gold will be seen as a way out of the global economic turmoil. A study made by Merrill Lynch & Co Inc under the team leader Francisco Blanch shows gold prices can shoot up to $ 1,500 an ounce in the near future. The $700-billion US bailout package for financial institutions and billions of dollars being infused into the system by governments and central banks across the world and the contemplated cut in interest rates would fuel inflation. Crude oil prices would reach $150 a barrel. However, other experts have predicted higher prices for crude oil.
"Despite prices of gold reaching all-time high levels, people do consider spreading their investments partly in gold, as it has always acted as a safe haven for panicked investors. The investment value has never eroded. Rather, gold has given better returns in the last few years. There are predictions that gold prices may soon touch Rs 15,000 per 10 gm," said the CMD of MMTC India, Sanjiv Batra. MMTC is India's largest trading company in the public sector, responsible for importing commodities like gold, silver and platinum. As fears of a likely global recession remain high and the fluctuations of forex rates continues, investors are lining up for investment in the yellow metal, which has been the place for investment through the centuries.
Global prices of gold still continue to remain high, after reaching a peak of over $863 an ounce last month. At LME, on Friday, prices eased slightly below $800 an ounce.
India, like many other countries, is currently facing the impact of a global economic crisis in terms of a meltdown in the equity market and high commodity prices. The price inflation rate measured on point-to-point movement in the wholesale price index still remains at 11.44%. Recently, the Indian rupee has begun depreciating against the dollar by more than 20%. With a view to save the economy from the impact of a global crisis, the Reserve Bank of India has taken some measures for infusing liquidity in the market, but fell short of calling for a cut...