Standard gold hit six-week high in the popular Zaveri Bazaar here on Wednesday following overseas trend with investors booked yellow metal as risk aversion tool at the time of global economic uncertainty.
Gold gained 0.60% to settle at Rs 25,865 per 10 grams on Wednesday, thus witnessing an overall 2.25% jump since Monday when China-led the global equity turmoil witnessing 6% decline in its benchmark indices. Since then, global equity markets have lost significantly.
Adding to that was the announcement of nuclear test by the North Korea after escalating geo-political tensions in the Middle East.
Following Iran severing ties with a number of neighbouring countries including Saudi Arabia, tensions in the Middle East, the oil rich nations, intensified which is supporting gold.
"The surge in gold price can be attributed to many factors from a meltdown in global equity markets to escalating tensions in the Middle East. As a consequence, gold saw safe haven buying from investors," said Gnanasekar Thiagarajan, Director, Commtrendz Research.
Spot gold in London also jumped to 1-month high to trade above $1,087.2 an oz on Wednesday. Experts see gold price to touch $1,100 an oz soon.
Silver, however, has lagged behind due to weak sentiment in base metals. Since over a third of global silver output is used for industrial purpose, its price normally move in tandem of metals. Following overseas trend, silver price recorded a rise of 1.35% in the last three days with investors remained cautious in the white precious metal.
