Gold struck another historic peak of Rs18,000 per 10gm in the national capital on Wednesday on sustained buying by stockists for the current marriage season amid a weakening dollar and reports that more central banks might purchase gold from the International Monetary Fund (IMF).
The yellow metal spurted by Rs220 to Rs18,000 per 10gm, a level never seen before, on seasonal buying and as prices in international markets touched record levels with the dollar extending its losses.
Traders said a weak dollar made the precious metal cheaper for buyers using stronger currencies. Gold hit $1,180.20 an ounce shortly after 1230 IST in trading on the London Bullion Market. The yellow metal is benefiting from its reputation as a hedge against inflation and anaemic economic growth in the West.
Gold has rallied 11% after India bought 200 metric tonnes of gold from the IMF in October. Mauritius, Sri Lanka and Russia have followed suit since then.
"Gold is moving at a fast pace ever since central banks started purchasing the metal," said Rakesh Anand of RK Jewellers, and added that the market is already passing through a bullish time on buying for the current marriage season.
The precious metal in the Asian region traded 0.8% higher at $1,179.20 an ounce while in futures trading in New York it surged to a record $1,181.60 an ounce.
The market is experiencing a rising demand from investors following a weakening dollar and volatile equity markets, said Delhi-based bullion merchant Ravi Jalan.
"The Reserve Bank of India purchase has raised speculations that more countries may follow suit, which extended strong support to the bullion markets across the globe," Mr Jalan said.
The IMF, which set out two months ago to sell one-eighth of its gold reserves, still has more than 200 tonnes to dispose of and will do so on a 'first-come, first-serve' basis, reports quoted market experts as saying.
Bullion, which typically moves inversely to the dollar, also increased for a fourth day after the dollar dropped for a third day against a basket of six major currencies.
The greenback weakened against 15 of its 16 most-traded counterparts after a Japanese report showed the nation’s exports dropped at the slowest pace in a year as government spending worldwide boosted demand.
In the national capital, standard gold shot up by Rs220 to Rs18,000 per 10gm and sovereign by Rs100 to Rs13,800 per piece of 8gm—also a record in line with the surging gold prices. -Yogesh Sapkale[email protected]