Bullion topples records

Gold crosses Rs 8,500 per 10 gm; Silver hits Rs 17,400 a kg

Domestic gold and silver prices rose to their respective all-time highs in tandem with spiralling overseas prices.

Gold price rose to cross Rs 8,500 per 10 grams level (ex-Mumbai) as overseas spot touched a new 25-year high of $588.8 an ounce. With value-added tax, the retail price of gold was Rs 8,585 per 10 grams.

Silver price rose Rs 210 per kilogram today to Rs 17,400 (ex-Mumbai) in line with overseas price at 24-year high at $11.71 an ounce, compared with 11.91 an ounce seen Friday.

Gold prices are on an uptrend as investor buying remains strong with the US Federal Reserve acknowledging that the American economy was weakening and hinted a further raise in interest rate. Spiralling silver prices, in anticipation of the launch of the exchange traded fund, are also supporting the rise in gold prices.

"Interestingly, spot price of gold is same across the country (except in Tamil Nadu) and physical demand has completely vanished at such high levels," said Suresh Hundia, director of Hundia Exports.

"The week is seen firm and some correction is imminent before the yellow metal crosses the psychological $600 an ounce. In case of silver, $12 an ounce mark is likely but it remains difficult to predict the level to which upswing will continue," said V. Sivaramakrishnan, executive director of Dubai-based Kombench DMCC.

According to T. Gnansekar, an independent analyst, the uptrend for gold and silver prices is likely to continue. "In gold, $620 an ounce is likely but it is quite difficult to predict in case of silver at the moment," he said.

The rise in prices has affected domestic gold buying ahead of the wedding season. "Overall, hoarded gold is expected to come out," said Gnansekar. Market players expect fresh buying for the marriage season to be down 30-35 per cent this year.

"Demand will, however, will remain even if it will be lower as Indians cannot do without gold," said Harmesh Arora, a Mumbai-based bullion wholesaler and former vice president of Bombay Bullion Association. The marriage season in the country beings April 12 and the auspicious occasion of Akshayatritiya, which sees huge gold marriage, is on April 30.