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BW Businessworld

Gold Price At Record High

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Gold price surpassed all previous records on 23 August to touch the Rs 31,035-mark per 10 grams in tune with global prices that touched a 16-week high amid a weak dollar on anticipation of a fresh stimulus by the US to boost economic growth.

In the spot market, prices of the precious metal rose by Rs 290 to Rs 31,035 per ten grams in the national capital, surpassing the previous record of Rs 30,750 set on June 19.

In Mumbai, gold prices increased by Rs 135 to Rs 30,515, while in Kolkata the rates rose by Rs 235 to Rs 30,960. The prices of the precious metal in Chennai gained Rs 270 to Rs 30,685 per 10 grams from the previous day close.

Traders said the domestic gold price was supported by a strong rally in the overseas market and pick-up in demand from stockists and jewellers for the upcoming wedding season.

"Any change in global prices reflect in the domestic market. International prices rose on hopes of third round of stimulus by the US government to boost economy, lifting investment sentiments," commodity brokerage firm SMC Comtrade Managing Director D K Aggarwal told PTI.

Weak dollar index against other currencies also helped gold prices surge, he said, adding that weaker dollar increased the metal's appeal as an alternative asset. Indian rupee appreciated to 55.41 against US dollar today.

In the international market, gold rose to a 16-week high to $1,665.09 an ounce and silver gained by 2.5 per cent to $30.57 an ounce.

Back home, silver prices also increased by Rs 1,000 to Rs 57,000 per kg on strong global cues. Silver coins rose by Rs 3,000 to Rs 72,000 for buying and Rs 73,000 for selling of 100 pieces.

However, total gold demand in the country is expected to be down by 50 per cent at 30-35 tonnes in the current month from over the year-ago period, as per the Bombay Bullion Association.

India's festival and wedding season is under way and continues till November. Gold sales are expected to fall 40 per cent this festival season to 200 tonnes.

Gold priced in rupees has hit record highs. Imports have already halved so far this year and a likely drought could further dent rural demand. Rural areas contribute to about 60 per cent of the country's demand.

Spot gold - priced in dollars - is up nearly 3 per cent so far this month. Demand has been boosted by growing expectations of Fed QE and ECB govt bond buying.

However, without physical demand from the world's top consumer, prices may not rally much further.

(Agencies)
 


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