Rise in food inflation to 13.39% causes alarm for policy makers on the back of losses in kharif output while government is pinning hopes on increased rabi output. RBI''s gold buying has spread positive sentiments and NMCE has now launched a futures aimed at gold retailers

According to the RBI release, total foreign exchange reserves including gold and SDR (special drawing rights —the reserve currency with IMF) dipped by $1.129 billion to $284.4 billion during the week ended October 30. While foreign currency assets dipped by $1.580 billion, the value of SDR dipped $25 million. The value of gold in reserves rose $484 million to $10.8 billion.

“There is no buying happening at these high gold prices. Customers are coming to jewellery shops to sell old gold, not to buy new gold ornaments and gold coins. Everyone feels that this is a market to sell, but to buy. In fact, this is market for scrap gold, not for new gold to invest in,” says Sanjeev Srivastava, a gold trader in Mumbai’s Zaveri Bazaar.