Prices of palladium, mainly used in vehicle exhaust systems, may average $300 an ounce next year, compared with $233 so far this year, as the global market stays in deficit following a shortage estimated at 11.3 tons this year, he said. Russia, the world’s largest palladium producer, may sell 40.4 tons of the metal from the state stockpiles this year, compared with 39.8 tons in 2008, Ryan said. The country will continue to sell similar volumes next year, capping the gain in prices, he added. "

Something else that appears to be in surplus mode right about now, is the amount of gold hanging from the hooks of vendors stretching from Dubai to Mumbai. Want to buy gold? Below spot? You actually can. Just book a ticket to exotic locales. Daily News and Analysis reports on the strangest of twist now taking place in the gold biz. And, it is NOT a scam! The merchants need to make a living, folks. Gold demand remains elusive in India, even as the biggest gold-buying related festival of Dhanteras fast approaches. Let's see if the shoppers will bite - at all:

"The international price of gold may be at its precious highest, $1068.80 (Dh3922) an ounce yesterday, but jewellery retailers are offering major discounts to combat dwindling sales. The Dubai Gold and Jewellery Group, that tracks and sets the price for Dubai markets, yesterday, had 24 carat gold selling for Dh126.50 a gram and 22 carat at Dh118.25 a gram. At souqs and malls across the emirate, the precious metal in its 22 carat form was retailing for much lower than the above benchmark.

"In terms of the per gram value the price of 22 carat gold now ranges anywhere between Dh106 a gram to Dh118 a gram," a gold dealer told Emirates Business. Calculation of the per gram selling price of 22 carat gold involves calculating 92 per cent of the price of prevailing market price and then adding a suitable premium. It's primarily the premium that traders are willing to concede to bring back the customers, market sources said.

"Low retail demand of gold is forcing jewellers to dispose their gold at prices lower than the prevailing market rates," said Sajith Kumar PK, CEO of JRG International Brokerage, DMCC. The retailers are not selling at a loss though. Sajith explains that gold being disposed at a "discount" now was bought months earlier at much lower prices.

Jeffrey Rhodes, CEO of INTL Commodities, warned that prices can fall sharply if all "speculators head for the exit doors at the same time". Gold could drop to a low of $920 an ounce in the medium term, Sajith said. Gold yesterday rose to a record in New York and London on speculation that a weakening dollar and faster inflation will boost the appeal of precious metals. Futures reached $1,069.70 an ounce in New York, while spot gold climbed to $1,068.63 in London."

Jon Nadler is Senior Analyst, Kitco Metals Inc.

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