Gold surges Rs 165 to hit record Rs 7585

Still riding on the wave of fund and speculative buying, standard gold today hit yet another new high of Rs 7,585 "� a gain of Rs 165 over the previous day. In just two months "� between October 1 and December 2 "� standard gold gained Rs 855 per 10 gm in the physical market.

Gold (0.999) moved in tandem and gained Rs 165 to close at Rs 7,625 on Friday.

Prices of gold and silver on Multi Commodity Exchange went up today with trading worth Rs 1,610.43 crore, which includes 12,194 kg gold worth Rs 920.4 crore. December contract Gold rose by Rs 73 per 10 gm to close at Rs 7,590 per 10 gm, while February contract gold closed at Rs 7,547 - up by Rs 55. April contract closed at Rs 7,571, up Rs 63.

December contract gold on National Commodity & Derivatives Exchange of India jumped Rs 75 to Rs 7,572, while January contract gold surged Rs 65 to Rs 7,556 and February contract perked up by Rs 71 to Rs 7,554 per 10 gm today.

Internationally, gold prices surged to a near 23-year high in Asian trading, in which Japanese investors have, in particular, been very active. In the mid-session trading, gold soared to a peak of $506.50 a troy ounce - the highest since February 1983 when bullion peaked at $509.20.

"Gold is all set to touch the Rs 8,000 mark by the first/the second week of January, but a correction is imminent, which would bring prices to the Rs 7,200 level," said Prithviraj Kothari, director of Riddhi Siddhi Bullion and a member of Mumbai Bullion Association.

"Gold may see a high of Rs 8,000 by December 15. After touching it, the metal cannot sustain the level, and hence, a bullish sentiment would set in," said Harmesh Arora, head of NIBR Bullion and vice-president of Mumbai Bullion Association.

"The physical demand is negligible, and the positive sentiment of the marriage season would not be seen at all in the next one month because of Makar Sankranti. Hence, demand would be hit further," Kothari said.

Besides, about 700 kg scrap is coming in to the market from household consumers and small investors. So, prices are moving up only because of currently very active hedge funds "� especially from Japan where yen is weakening all the time, he added.

At present, Japanese yen is driving gold to new highs, with 75 per cent of the money invested in gold is coming in from Japan alone. At the international level, gold prices may see the range of $510-515 in the short term and up to $520 in the long term, Arora added.

"Leave everything aside and buy gold. Whenever you need to buy any other thing. Sell gold only to meet your other need - and goods. Hold gold as much as possible since analysts are expecting gold prices to keep rising till they reach the all-time high of $850," analyst Madhusoodan Daga said.