It was reported from MUMBAI Commodity Online that after tasting success with its campaign to sell gold coins across India’s post offices, the World Gold Council (WGC) is getting ready to launch a new version of gold traded on paper in India. The new form of paper gold, just like the Gold ETFs, will be launched in the Indian market in the next few months.

According to WGC India Managing Director Ajay Mitra, India offers tremendous potential not just in the sale of physical gold, but all forms of gold transaction methods. While India has six Gold ETFs successfully running and attracting good investments, WGC is talking to a number of players to launch a new version of gold traded on paper.

India is one of largest consumers and importers of the yellow metal in the world. While most Indians prefer buying gold jewellery and gold coins as investment, a large number of investors are now scouting for investment-led gold instruments like ETFs.

“We hope to launch newer paper gold – gold traded on paper in India by June this year in India. The paper gold will be stored by a custodian, whoever is channelising that venture,” Mitra said.

He said India Post, the post services department of the Indian government could be an ideal partner for the distribution of the new Gold ETFs. India Post has partnered WGC in promoting and selling gold coins across hundreds of post offices in the country.

The WGC official said that the apex gold body has decided to launch the new paper gold in India as consumers have been saying that storing physical gold at their homes is becoming very inconvenient.

The paper gold instrument will help investors and customers in getting rid of storing their precious gold. India Post officials said as per the new initiative, a customer can buy paper gold from any of their branches and keep it as safe investment.

Bullion experts believe the new paper gold idea from WGC will drive up gold investment demand in India.

“It is going to be a wonderful idea, if a new form of paper gold can be launched in association with WGC in India. I am sure thousands of people will just buy paper gold from post offices instead of physical gold from jewellery shops as investment. This will push up gold demand in India,” Kiram Mehta, a bullion analyst in Mumbai told Commodity Online.

Mehta said different types of paper gold instruments can be launched in India in tie ups with broking houses, institutions and banks. “This is a really big opportunity that can catch up the investor appetite for gold in India,” he added.

Across the world, paper claims to physical gold have so proliferated during the past two decades.

It was analysted that expect platinum and palladium, used in catalytic converters, to rise further, after gaining 14 percent and 28 percent respectively since late December, but also warn of a correction on concerns over the still ailing auto sector.

The platinum group metals (PGM) rise and the dollar’s dip against a basket of currencies lifted gold, but analysts said fresh impetus was needed to push bullion higher as there was little support from currency markets with the euro under pressure.

Spot platinum rose as high as $1,626.00 per ounce, its highest since August 2008, and was at $1,612 an ounce by 2:52 p.m. EST, up about 1 percent on the day.

Spot palladium rose as high as $459 an ounce, its highest since early July 2008, and stood at $457.50 in late trading, up about 1.1 percent from Friday.

“We saw the opening of the U.S. ETFs this month, that’s proved relatively popular so far. We’ve seen a little bit of switching from gold to PGMs overall, so that’s driven the price,” said Commerzbank trader Rory McVeigh.

A U.S. subsidiary of London’s ETF Securities launched the products last Friday, and uptake has been healthy. About 170,000 ounces of metals were added to the products in the first two trading sessions.

But McVeigh said the lack of a solid recovery in the car industry could mean once the investment demand is saturated, both metals could be heading for a sharp correction.

“When it’s investment driven, the exit could be a lot harsher than the rise,” he said, but he did not rule out a rise to $1,800 an ounce for platinum in the short term.

Gold prices were up slightly but rises were limited as the euro remained under pressure due to financial problems in Greece and concerns over the potential impact on the single currency.

Investors have also kept to the sidelines because New York markets were closed on Monday for Martin Luther King Jr. Day.

Spot gold inched up to $1,132.50 per ounce compared with $1,129.90 an ounce late in New York on Friday. U.S. gold futures for February delivery were at $1,134 per ounce, up 0.25 percent.

“Until we get fresh momentum based on an event or data, gold is going to continue to struggle as long as the dollar is being preferred versus the euro,” said Tom Kendall, precious metals strategist at Mitsubishi.

Spot gold hit a five-week high of $1,161.50 on January 11. Gold has fallen 2.5 percent since then, as a rise in the greenback hurt investor sentiment.

The high gold price has hurt Italian jewellers, who are now turning to alternative materials such as leather, textiles and ceramics to offset prices, an industry executive at the Vicenza trade fair said.

Holdings by the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, fell 0.914 tonnes to 1,112.836 tonnes on Jan 15.

Silver prices were at $18.61 an ounce versus $18.36 an ounce late in New York on Friday.

It was reported that gold, little changed in London today, may climb as concern about the soundness of Greece’s public finances boosts the metal’s appeal as a haven. Palladium and platinum rose to the highest prices in at least 17 months.

European finance ministers meet today to discuss Greece’s budget deficit. The country’s worsening finances last month prompted credit-rating companies to cut its creditworthiness. The US Dollar Index, a six-currency gauge of the greenback’s strength, fell as much as 0.3 per cent today. Gold typically moves inversely to the dollar.

“The market is very concerned about the situation in Greece,” said Bernard Sin, head of currency and metals trading at bullion refiner MKS Finance SA in Geneva. “Gold is having speculative interest, rather than real physical demand.”

Gold for immediate delivery added $US2.65, or 0.2 per cent, to $US1,133.57 an ounce at 4:38 p.m. local time, paring a climb of as much as 0.6 per cent. Bullion for February delivery gained 0.3 per cent to $US1,133.50 in electronic trading on the New York Mercantile Exchange’s Comex division. Floor trading is closed today for the Martin Luther King Jr. holiday.

The metal declined to $US1,134.50 an ounce in the afternoon “fixing” in London, used by some mining companies to sell production, from $US1,135.75 at the morning fixing.

It was said from its chief negotiator on Saturday that China’s Tongling Nonferrous Metals Group has settled 2010 copper treatment and refining charges with BHP Billiton Ltd. at $46.50 a metric ton and 4.65 cents a pound.

“We have signed the agreement [for 2010] with BHP,” said Yang Jun, who also leads the China Smelters Purchase Team.

Tongling Nonferrous Metals Group is China’s second-largest copper smelter by output and the biggest purchaser of copper concentrate in annual contracts.

It was reported from the government that China discovered five billion tonnes of iron ore deposits last year.

More than three billion tonnes were located in the northeastern province of Liaoning, with the rest found in Hebei, Shandong, Anhui and Sichuan, said Zhang Hongtao, chief engineer of the Ministry of Land and Resources.

One billion tonnes of reserves in Hebei would be easy to mine because of their shallow depth, said Zhang, quoted in a statement posted on the ministry’s website on Friday.

China, the world’s biggest producer of steel, is also the largest importer of iron ore, importing around 50 percent — or 443.45 million tonnes — in 2008.

Steel production over the first nine months of last year added up to 618.6 million tonnes, according to the China Iron and Steel Association.

Each year, Chinese steelmakers enter bitter negotiations with the world’s top three mining giants — Brazil’s Vale and Anglo-Australian companies Rio Tinto and BHP Billiton — over the price they will pay for iron ore.

Annual iron ore pricing negotiations traditionally begin with Japan around November and take place alongside similar negotiations. China and Beijing’s massive imports have been a prime driver for price rises in the past few years.

The three firms have sidelined Beijing from annual talks to set a benchmark contract price, the Financial Times reported earlier this week.

The companies plan to present a “take it or leave it” price to Chinese steel mills once negotiations with Japan are complete, the report said.