Standard gold jumped 2 per cent or Rs 280 in the Mumbai bullion market today as political crisis in South East Asia and higher oil prices spurred demand, raising the metal’s claim as a safe haven investment.
Gold with .995 per cent purity closed the day at Rs 13,720 per 10 gm while pure gold (.999 per cent) ended the day at Rs 13,775 per 10 gm. The precious metal, thus, recorded a jump of Rs 900 during the week ended Monday.
With the current rise, Rs 14,000 per 10 gm is in sight as forecast by Navin Mathur, head-Commodity of Angel Broking. Mathur, however, doubted the sustainability of this level on the potential of profit booking.
The benchmark level of Rs 14,000 was breached in the first week of October when global economic crisis persuaded traders to put in more money into precious metals than any other asset class. But, the metal crashed on profit booking by funds and high networth investors.
“Many traders of other asset classes including equity, currency, oil, metals and real estate are looking for opportunity to book profits on their holdings. Gold’s level of Rs 14,000 would be the best bet. Hence, prices may not sustain at this level,” said an analyst.
The yellow metal was largely fueled by a weak rupee against the dollar, which slumped to 48.77 towards the end of the day. Also, crude oil touching $40.25 helped the metal show its full potential. Gold moves in tandem with crude oil and opposite to the dollar.
The yellow metal may perk up to $926 an oz in the global market on mounting tensions in South Asia with the biggest-ever rocket attack, in six months, by the Pelestinian militants on southern Israel. The tension between India, the largest consumer, and Pakistan also added fuel to the current price hike, the analyst added.
Despite the holiday mood, Indian investors are keen to own gold ahead of Makar Sankranti, the auspicious occasion to buy the metal. The wedding season is also around the corner. Therefore, fresh investment may intensify in the coming days, analysts said.
Meanwhile, gold for delivery in February jumped 2.45 per cent on the MCX in line with the spot market to close the day at Rs 13,720 per 10 gm while the metal for delivery in June shot up 2.36 per cent at Rs 13,750 per 10 gm.
Gold perked up fresh to $885.7 on Monday in London. The metal had jumped 4 per cent last week at $871 on the Comex division of the New York Mercantile Exchange, the biggest gain for a most-active contract since December 17. The metal is up 6.4 per cent this month. Crude oil rallied as much as 7.2 per cent during December.
