MUMBAI (Commodity Online): The Supreme Court verdict in the gas row between Ambani brothers Mukesh and Anil has come as a gift for Mukesh, the Indian government and gold.
Yes, apart from Mukesh Ambani and the Indian government, gold also cashed in on the crisis after the Supreme Court delivered the verdict in the RIL-RNRL dispute.
Immediately after the verdict was delivered, India's stock market crashed over 200 points. Bombay Stock Exchange witnessed a bloodbath as several investors wanted to sell.
This crisis in stock market immediately boosted the gold prices in India. Gold prices spurted by Rs 495 to regain the Rs 18,000 per 10 gm level after five months on heavy buying.
Standard gold surged by Rs 495 to Rs 18,110 per 10 gm in new Delhi, a level last seen on November 26, 2009.
Silver also jumped Rs 565 to Rs 28,165 per kg on increased offtake by industrial units and coin makers.
After India's Sensex crashed, investors wanted to park their money in safe havens like gold so they bought gold in a big way spurting the prices. The European crisis also added to the gold rally.
Gold in global markets, which normally set the price trend on the domestic front, recorded a handsome rally of $33.20 to $1,208.80 an ounce on Friday.
Meanwhile, MMTC Ltd, India's top gold importer, is likely to import 200 tonnes of the precious metal in the current fiscal year, considering the increased demand for the yellow metal.
MMTC, which is currently building a refinery in Haryana for making bullion jointly with Switzerland's PAMP S.A., would commence gold and silver medallion production in September.
Gold imports in the January-April period were at 126 tonnes, up 74 per cent from 72.3 tonnes in the previous year.
Terming natural gas a national resource, the Supreme Court had ruled that RIL cannot give gas to Anil Ambani's Reliance Natural Resources Ltd (RNRL) at a rate lower than the price fixed by the Centre. It also directed RIL and RNRL to initiate renegotiation of their gas supply master agreement (GSMA) within six weeks and finalize the new terms within another eight weeks.
RNRL was seeking 28 million metric standard cubic metres per day (mmscd) at $2.34 per million metric British thermal unit (mmBtu) for 17 years, to be supplied to its proposed 7,800mw power plant at Dadri in UP. It based its demand on the terms of a June 2005 agreement brokered by mother Kokilaben to divide the corporate empire of Dhirubhai Ambani.