Gold crosses 17K on global cues, marriage season demand

Gold prices surged by Rs 100 to Rs 17,100 per ten gram in the bullion market here today on sustained buying by stockists and jewellers to meet the marriage season demand and as investors increasingly are moving funds from the dollar into higher-yielding assets.

However, silver held steady in restricted buying at existing higher levels.

The latest price of the precious metal is just a little lower than the all-time high of Rs 17,150. Marketmen said stockists and jewellers continued to enlarge their positions to meet the current marriage season demand amid a rising trend in overseas market.

Trading sentiment remained bullish after gold climbed to an all-time high in overseas market supported by a weakening dollar. The gold in overseas markets rose by 1.1 per cent to $1,130.43 an ounce.

Gold in domestic market has been on a steady advance after the Reserve Bank of India bought 200 tonnes of the precious metal from the International Monetary Fund last month, underlining a strategy of reserve diversification and strong demand for the precious metal.

Analysts said they expected central banks to emerge as net gold buyers for 2009. The yellow metal broke $1,100 an ounce for the first time earlier this month following news that Sri Lanka had joined India in purchasing gold instead of the US currency.