Gold hovered around its two-month high in Mumbai on Saturday following similar guidance from global markets where a weaker dollar boosted the metal’s appeal as a hedge against the US currency.
Pure gold surged by Rs 65 to hit the psychological barrier of Rs 15,000 per 10 gm, while standard gold moved closure to this benchmark level to settle at Rs 14,935. The metal has surged more than 3 per cent in the domestic market in the last three days. Experts believe that the metal’s demand has increased in the global market as an alternative investment avenue.
The metal might still rise higher on fears of global inflationary concerns, said a local bullion trader. Although, the global economy is yet to show major signs of recovery, fundamentals are supporting the sentiment, thereby helping the precious metal to run its full course, the trader said.
Heading for its biggest monthly drop so far this year, the US Dollar Index fell on Friday on speculation that gains in equities spurred the demand for higher-yielding assets. Precious metals typically move inversely to the US currency. Gold is set for its best monthly gains since November.
Meanwhile, gold futures for delivery in August were up 1.5 per cent at $980.10 an ounce on Friday on the COMEX division of the New York Mercantile Exchange. The price surged to its highest level since February 25 at $981.50.
The yellow metal is also getting support from London-based precious metals research organisation Gold Field Mineral Services (GFMS) estimates, which has forecast that the metal may hit $1,000 an ounce this year.