Commodity Online
Which commodity do you want to bet on during these times of market meltdown and recession? Undoubtedly, it is gold in which investors and ordinary investors are betting on.

Growing uncertainty and endless skepticism about the bailout packages have now culminated into speculators increasing their bets this year by almost 24 percent saying prices will reach &1,000 an ounce by April. Open Interest in options on the COMEX has surged and the mounting turmoil is boosting demand for the precious metal as a safe haven.

"Gold performs best when the markets are doing badly and in the worst economic times," says Manasee S. Gokhale, Economist with India's National Commodities and Derivatives Exchange (NCDEX).

He says gold has gained for eight straight years and soared to a record $1,033.90 an ounce in March as mounting bank losses and a declining dollar increased demand for the metal as a store of value.

Gold in New York opened at $903.00/905.00 an ounce and the metal surged on the back of good fund buying. With Timothy Geithner’s statements about the $2 trillion package but the lack of clarity in the details brought skepticism causing markets to
tumble and Gold to rise. The metal did not sustain this fame for long and lost steam as the session came to an end, finally closing higher at $911.50/913.50 an ounce.

Silver opened at $13.14/13.19 an ounce and followed Gold higher to reach the day’s peak. It slipped from its highs following weaker Oil prices, trading lightly throughout much of the session. It later recaptured lost ground as the day came to a close, settling at $13.00/13.18 an ounce.

Meanwhile in India, gold sales have remained dull and not many seem to be buying the metal given the high prices. Despite marriage season being around the corner, demand has dampened and retailers seem worried over their poor sales. Prices have been high on global cues and due to what is happening in the international markets.

United States bailout package is stuck in the senate and speculation that the package will not really pull the economy back on its feet has bought Gold in the limelight and it seems likely that prices will remain high for sometime to come

As the Treasury Secretary Timothy Geithner pledged $2 trillion in government financing for programmes aimed at spurring new lending and addressing the ‘bad banks’ problem, U.S. stocks fell and the dollar and gold rose.

Standard and Poor’s 500 Index headed for its biggest drop since Barack Obama’s inauguration and treasuries rallied on growing skepticism about this entire rescue plan.

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