Commodity Online
MUMBAI: As investment demand for Gold keeps rising in the backdrop of the prevailing uncertainty in the global markets, gold miners seem to be cashing in on as the demand for yellow metal continues particularly for bars and coins.

Gold miners across the globe were faced with a situation of low demand in the middle of the last year, as gold demand had remained almost stable. Experts believe that gold demand should rise in the coming days across the globe. Countries including India, the largest consumer of the yellow metal had almost stopped the imports of gold in the wake of shooting prices and falling jewellery demand.

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However, the extreme uncertainty that has currently surrounded the global economy is believed to be the underpinning factor for the rising investment demand for gold bars and coins.

Considering this situation, experts believe that the price of gold might see yet another record upsurge, especially from the investors who would wish to take shelter from the financial collapse.

As global currencies continue to be vulnerable in the current financial crisis, investors have chosen gold as a traditional mode of investment to keep out of trouble.

Even though the demand for jewellery, which accounted for nearly 60 percent of global gold demand last year, fell drastically with the slowing global economy, gold prices have continued soaring accompanied by robust demand from investors.

Spot gold, which was trading at USD 939.85 an ounce on Thursday, had risen 40.6 percent in the last 18 months as the financial crisis had developed across the globe.

Stocks of Gold miners are found to be doing well despite the bearish stock markets. Gold mining companies listed on the New York Stock Exchange (NYSE) witnessed a positive run since the global economy has been sliding into the recession.

Harmony Gold Mining Co. closed positive on Thursday on NYSE as the stock had appreciated from its 52-week lows of USD 5.47 during October-November 2008 to USD 12.41 at present.

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Similarly stock prices of Gold Fields Ltd, one of the largest gold miners in South Africa, rose from its 52 week low of USD 4.64% on 24th October 2008 to USD 10.30 yesterday.

Another gold miner, New Mont Mining Corporation rose up since 20th November 2008, when the stock price was at its 52-week low of USD 21.17. On Thursday the stock closed with a rise of 1.5% at USD 40.68.

Gold miners' shares have done well relative to other sectors, and that Canada's Kinross Gold and Australia's Newcrest Mining had outpaced the metal since the end of October 2008. Production costs, mainly energy and steel, have come down for gold miners, which have helped them boosting their margins.

Experts have warned about the volatility of gold mining shares, which is far greater than bullion itself that for every 1 percent fall in the price of gold, gold miners' shares would fall 3 percent. They have also recommend investors to hold 5 percent of their portfolio in bullion and another 5 percent in gold miners.

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