Gold prices cross $914 in London

Domestic spot prices set new records, MCX futures close at all-time high.

With fears of recession and uncertainty looming over the global economy, gold prices hit yet another record at $914.10 an ounce in London on Monday morning.

Repercussions were seen in the Indian market as well, where standard gold (99.95 per cent purity) touched an all-time high at Rs 11,600 per 10 grams while pure gold (99.99 per cent purity) perked up to Rs 11,650 per 10 grams in Mumbai. The metal closed at Rs 11,575 and Rs 11,625, respectively, for the two qualities.

Gold, which gained nearly 70 per cent last year, continued its upsurge with the dollar weakening and prices of crude oil remaining volatile.

On Monday, investors were seen pouring money with the hope that the metal would continue the trend to hit $1,000 an ounce. However, the metal slipped to $911.40 in London on profit booking from a section of traders.

The streets of Zaveri Bazar in downtown Mumbai remained deserted throughout the day with buyers shying away. Not only retail consumers but also stockists are keeping themselves from fresh bookings as they see a correction coming.

"The absence of traders is not unusual when prices shoot up unexpectedly. Once prices stabilise, traders will return to the market," said Haresh Kewalramani, a large precious metals trader in Mumbai.

Gold for spot delivery in London hit the all-time high of $912.8 an ounce in early trade on Monday as traders, lured by big returns, bought heavily.

Although crude also offered about 50 per cent returns last year, there is little opportunity for further price appreciation.

With other investment avenues, including the US dollar, resulting into huge losses, traders are chasing gold in a big way. Gold futures on the Multi Commodity Exchange moved up one per cent to hit lifetime highs.

For February delivery, the metal closed at Rs 11,492 per 10 grams, a rise of 1.18 per cent, while for delivery in December, it ended the day at Rs 11,795 per 10 grams, a gain of 1.21 per cent.

Following suit, silver closed at Rs 20,800 a kg, a gain of Rs 400 in Mumbai. The metal has gained more than Rs 1,000 a kg since January 1, in line with an upsurge in London where the metal hit a lifetime high at $16.56 an ounce.