Gold and silver set a new record in Mumbai’s Zaveri Bazar on Thursday following the move in the global markets where prices shot up to near their all time high, due to geopolitical instability in West Asia and fears of global inflationary concerns.
The prices of standard gold rose nearly one per cent or Rs 200 to settle at Rs 20,970 per 10 grams, while pure gold closed with similar gains at Rs 21,070 per 10 grams.
Similarly, silver ended the day with a gain of two per cent or Rs 1,055 at Rs 52,060 per kg leaving the street dry for fresh investors.
“Although, need based buying continued, new investors preferred to stay away from fresh bookings. Many regular buyers I spoke to said the fight in Libya will end soon. And then price will start cooling down,” said Ketan Shroff, partner of Mumbai-based Pushpak Bullions, a precious metals trader.
The turmoil in the oil rich Libya is fueling crude oil prices which, in turn, are supporting the precious metals’ upward march.
Libya is moving towards a peace deal between the rebellion fighters and the ruling government. Speculations that a peace deal may be brokered for Libya prompted some investors to cash in gains in oil and precious metals, but the market remained elevated on concerns over ongoing unrest in the region.
A report in the Arab League was considering a peace plan for Libya proposed by Venezuelan President Hugo Chavez led some players who had bet on rising prices to close their positions overnight.
Meanwhile, brent crude oil was at $115.5 a barrel, down by a marginal 0.6 per cent but well off earlier lows of $113.09. US crude oil was down 44 cents to $101.79 a barrel.
In contrast, on the Multi Commodity Exchange (MCX), gold for delivery in April was traded with a loss of 0.36 per cent at Rs 21,075 per 10 grams. Far month contracts were lower. The gold contract for delivery in October 2011 remained traded with a decline of 0.34 per cent at Rs 21,920 per 10 gram while the metal for delivery in August slipped 0.38 per cent to trade at Rs 21629 per 10 gram.
In New York, gold for April delivery rose by $ 6.50 to settle at a record $1,437.70 an ounce on the Comex division of the NYMEX on Wednesday. Silver added 41 cents to end at $ 34.84 an ounce highest close in 31 years.