Gold to touch 10,000 mark

Escalating tension in the West Asia and the consequent rally in crude prices may help gold cross the Rs 10,000-mark.

The price of standard gold in Mumbai surged by Rs 170 at today's close from Rs 9,940 recorded yesterday. This week has been an eventful one for the yellow metal as prices have increased by about Rs 600 per 10 gm.

On Monday, standard gold in Mumbai closed at Rs 9,360 per 10 gm. But the Tuesday's serial blasts in the financial capital of the country, coupled with the Iran's refusal to give up its uranium enrichment programme, drove the precious metal to scale the Rs 9,690 levels on Wednesday.

On Thursday, the rally continued in the bullion market as geopolitical tensions have further intensified. In Mumbai, gold breached the Rs 9,700-mark to close at Rs 9,770 amid escalating tensions following the Israeli attacks on Lebanon and the crude supply disruption in Nigeria.

Nigeria supplies 6 lakh barrels of crude daily and the disruption has reduced the supply by 17 per cent.

Higher crude prices, too, are pushing up the gold prices. Investors have been prompted to buy gold as a haven and hedge against rising inflation. Among the previous day's data releases, Initial Jobless Claims were up by 12K from the expected one, which had positive impact on gold prices.

Charts are showing a bullish trend and gold may soon touch the 10,000-mark yet again, said a Karvy Commodities Broking analyst. On May 12, gold prices had touched the 26-year high of Rs 10,750.

Gold often follows oil prices since investors use the metal as a hedge against inflation when energy prices shoot up. The rally in the yellow metal was quite evident at the futures market too.

Gold futures prices at Multi Commodity Exchange for August and October delivery today surged to Rs 9,919 and Rs 10,051 from Rs 9,397 and Rs 9,540 on Monday.