Gold touched a month’s high today as bullish sentiment prevailed ahead of the wedding season. Brisk buying was also triggered by similar global movements.
After hitting Rs 17,000 per 10 gm in intra-day trade, gold cooled to close the day at Rs 16,905 per 10 gm, on profit-booking by traders. It, thus, recorded a 0.8 per cent gain from the previous close. Pure gold closed with a gain of Rs 130 at Rs 16,995 per 10 gm in Zaveri Bazar, the popular spot bullion market.
Jitendra Jain, a partner with Jugraj Kantilal, a Mumbai-based jewellery retailer, termed the decline after reaching the Rs 17,000-level a temporary thing, given that the wedding season was only a month away.
In New Delhi, gold surged by Rs 175 to hit another month’s high, to trade at Rs 17,100 per 10 gm. The yellow metal had seen this level earlier on March 4.
Analysts believe the metal is gaining support from other asset classes, as investors are shifting their money from weakening equity markets to bullion. Spot gold surged to $1,162.40 an ounce on Monday as compared to $1,160.80 an ounce in New York’s previous session. In London, gold hit a four-month high of $1,168.70 an ounce, as the euro surged against the dollar, after euro zone finance ministers decided on a big aid package for debt-laden Greece.
The rescue package prompted a short squeeze in the currency, resulting in the euro hitting a one-month highs versus the dollar. This also buttressed the metal’s traditional claim as a safe investment option at any time of global economic uncertainty.
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Spot gold typically benefits from weakness in the dollar, which lifts the yellow metal’s appeal as an alternative investment and makes dollar-priced assets cheaper for holders of other currencies.
In Singapore, the metal gained 0.7 per cent to $ 1,170, the highest level since December 4, 2009.
Meanwhile, India’s gold import was recorded at 25 tonnes in March 2010 as against near-zero in the corresponding month last year.