Gold inches steadily towards record high

Gold is inching steadily towards all time high amid fears of worsening Euro zone debt crisis in the countries like Greece which strengthened dollar against major global currencies.

Standard gold continued its rising momentum 6th straight day on Wednesday recording a staggering Rs 620 or Rs 2.83 per cent rise since May 19. On Wednesday alone, the yellow metal rose 0.67 per cent or Rs 150 to close at Rs 22,520 per 10 gram in Mumbai’s popular Zaveri Bazar. Silver followed the suit to close at Rs 57,245 a kg, a rise of 4 per cent (Rs 2,305 a kg) from the previous day.

Gold had set the historical high price record of Rs 22710 per 10 gram on April 30 this year on consumers’ continued appetite for both jewellery as well as investment purposes.

Euro is currently trading at 1.4058 against US dollar while the greenback quoted at Rs 45.36 against Indian rupee.

Basant Vaid, Senior Research analyst of Bonanza Portfolio Ltd, a Mumbai-based broking firm said, “Gold prices in euro were traded near to all time high levels in pounds but, gains were limited in dollar term strengthening US currency.”

Spot gold in London hit $1,528.40 a troy ounce, its highest since May 4. It was bid at $1,526.79 an ounce in early Wednesday trade from $1,525.75 an ounce late in New York on Tuesday. The precious metal in euro term hit a record ¤1,087.84 an ounce. Gold priced in sterling was at pound 942.60 per ounce, near a lifetime high of pound 944.87 struck on Tuesday.

Amid fears of contagion effects of Greece’s finances on other countries including Portugal and Ireland, the dollar rose against the euro as investors retreated from the single currency on escalating worries.

Demand for the physical gold in India remained sluggish for the third consecutive day as the prices started its northward journey once again after a consolidation at the lower levels. These high prices of gold have discouraged jewellers to buy more gold at the current levels.

Vaid forecasts gold prices to keep trading strong supported by the European concerns and global inflation fears. On breaching the level of $1540, the yellow metal may touch even $1565 in coming days.

Gold future for delivery in June on the Multi Commodity Exchange is quoted at Rs 22474 per 10 gram, a jump of 0.41 per cent from the previous day.

The World Gold Council, the body funded by global miners, estimated 11 per cent rise in worldwide gold demand in the first quarter of 2011 totaling 981.3 tonnes, equivalent to $43.7 billion in value terms. Global demand for physical bars and coins was up 52 per cent year-on-year at 366.4 tonnes.