Gold hits new high of Rs 6770

Gold surged to an all-time high at Rs 6,770 per 10 gm owing to speculative and fund buying ahead of festival season despite lower demand from retail investors.

"Though retail investors have stopped buying, gold is looking up owing to strong fundamentals," said Prithviraj Kothari, director, Riddhi Siddhi Bullion, and member, Mumbai Bullion Association. "Generally, people start using scrap, thereby, lessening demand for primary gold," he added.

Lots of kaccha mal (raw gold) has entered the market and customers also buy as they do not understand the purity of gold fully. At its peak , individual consumers also start offloading and reaping maximum possible benefits.

"Once this yellow metal reaches the peak, government also starts profit booking. Therefore, as an individual buyer, one needs to be careful," Kothari cautioned.

Gold steadied early Friday in Asia and advanced steadily to $473.5 an ounce, moving towards its 18-year high it reached last week.

"Gold was sold today at Rs 7,000 per 10 gm in the rural area on retail basis. It means a consumer who buys not less than 10 kg of gold has to pay Rs 7,000 per 10 gm", Harmesh Arora, vice-president, Mumbai Bullion Association and head, NIBR Bullion, said and added that fundamentals are indicating further rise in prices in future as well.

"Generally, the festival and seasonal demand in India starts after shradh paksha. But this year the prices has already touched the peak, therefore, the price will remain conservative, he added.

"The current price in the domestic market could be at two decade high. Therefore, I see a minor correction in prices on either Monday or Tuesday. Monday, being the first trading day of the week, the correction could take place on Tuesday. But, the downward trend is certain", said Bhargav Baid, proprietor, B N Vaidya and Associates.

"In the international market too, a correction is bound to take place in the range of $10 before the yellow metal to reach $480 per ounce," Baid warned.

"The 2-3 months average price of gold would remain downward in the range of $20 as India imports about 700 tonne of gold, much more than its total consumption."

Meanwhile, on domestic exchanges the gold trade has declined dramatically. After reaching an all time high at Rs 2,208 crore last Monday on Multi Commodity Exchange of India, the gold turnover on Friday declined dramatically to Rs 481.06 crore. Total volume also came down within a week to one fifth on Friday to 7,100 kg from 32,867 kg on Monday.

Gold on National Commodity and Derivatives Exchange of India gained Rs 35 across all sections and closed higher at Rs 6,755 (October), Rs 6,763 (November) and Rs 6,752 (December). The total quantity trade on NCDEX was 1271 kgs for October, 1222 kgs for November and 650 kgs for December.