Gold prices to scale new heights this year

LONDON: Gold prices the world over is all set to scale new heights this year as spot gold prices in London rose to $ 907.70 on Tuesday.

Number of factors including record crude oil price, volatile stock markets and a struggling U.S. dollar would keep gold’s surge throughout the year, analysts said.

Indian gold futures also opened higher on Tuesday in tune with foreign Markets where the metal extended gains and a weak rupee.

Jewelry consumption rose to 558 tons in India, the world's largest gold buyer, in 2007 from 526 tons in 2006, although fourth-quarter demand dropped more than 60 percent to 54 tons from 165.4 tons year-on-year.

Sky-high gold prices did little to curb demand for jewelry in India, China and some other Asia countries in 2007, suggesting that buyers recovered from initial shocks sparked by persistent rallies in bullion.

Gold jewelry is the most common gift during religious events in India and forms an essential part of a dowry basket. Annual investment demand in India rose to 215 tons last year from 196 tons in 2006.

In China, jewelry consumption jumped to 302 tons in 2007 from 245 tons in 2006, while investment demand firmed to 24 tons from 15 tons. While fourth quarter demands for jewelry declined in some key consumer areas in Asia last year, China showed an increase of 18 percent to 77 tons.