Gold zooms to 3-month high on demand surge; Fed meet in focus

Mumbai :Maintaining its bullish trend, gold prices shot up to a three-month high at the domestic bullion market here due to heavy demand from stockists as well as good seasonal buying support.

Silver also surged to close above the key Rs 35,000 mark on the back of heavy industrial demand.

Depreciating rupee value and anticipation of robust demand ahead of the upcoming wedding season aided the sentiment.

Standard gold (99.5 purity) jumped by Rs 285 to finish at Rs 26,730 per 10 grams from Monday’s closing level of Rs 26,445.

Pure gold (99.9 purity) also surged by a similar margin to end at Rs 26,880 per 10 grams as against Rs 26,595 earlier.

Silver (.999 fineness) climbed by a hefty Rs 620 per kg to conclude at Rs 35,385 from Rs 34,765 previously.

Since the beginning of the year, gold has been witnessing a massive surge owing to solid investment demand against the backdrop of a bearish trend in equities as well as speculative offtake driven by positive overseas sentiments, a bullion trader commented.

The consistent upmove in prices has instilled some confidence among local buyers who have started accumulating in small quantities and also restocking by jewellery stockists and traders ahead of the wedding season, largely supporting the case for further upmoves, he added.

The yellow-metal has gained over 7 per cent since the beginning of the year.

Meanwhile, the shiny metal moved down modestly in overseas trade after hitting a two-month high in early trade amid caution ahead of the Federal Reserve’s policy meet outcome later in the day.

In the meantime, benchmark crude had stabilised above the USD 31 per barrel after Iraq’s oil minister said that Saudi Arabia and Russia were showing greater “flexibility” over production, lifting hopes of an output cut in the market.

Spot gold was substantially lower at USD 1,116.80 an ounce in early European trade, while silver quoted weak at USD 14.37 an ounce.