Standard gold jumped by 1.58 per cent, or Rs 240 per 10 gm, on the Mumbai bullion market on Friday on persistent buying by stockists ahead of Akshaya Tritiya (on April 27, considered an auspicious day for buying gold), following an overnight rally in New York. The metal remained firmly underpinned by investors’ interest towards safe haven buying.
The precious metal closed in the spot market at Rs 15,425 per 10 gm. Investors are worried about the outlook on inflation and dollar’s weakness.
Spot gold hit a peak of $966.70 an ounce, its highest since February 25. And it eased in the early evening trade to $954.25 from the late Thursday’s level of $958.60 as the dollar recovered the lost ground against the euro.
Looking at gold stabilising above $900 and heating up to $950, Barclays Capital has lifted its gold price forecast for 2009 to $940 from the previous forecast at $900. According to the banker, prices may rise to $905 in the second quarter from $872 in the first, to $950 in the third and to $980 in the last three months of the year.
Meanwhile, retail investors stayed away from the market due to the rise in prices as they wait for the prices to cool down.
According to the latest announcement by the Federal Reserve, the US would buy $300 billion in longer-dated treasuries, which raised apprehensions about dollar weakness and rising inflation resulting in higher prices globally.
The dollar was heading for its biggest weekly fall in 24 years earlier on Friday, though worries over the eurozone economy have since lifted it from its lows versus the single currency. Meanwhile, investor interest in gold remains firm, with the world’s largest exchange-traded fund, the SPDR Gold Trust, reporting a fresh 15.28-tonne inflow on Thursday which brought its holdings to a record.
