Gold prices see a rally

THE DAY AFTER: MUMBAI ON THE MOVE

Yesterday's serial bomb blasts in Mumbai and Iran's refusal to compromise on its nuclear programme has driven up gold prices by more than Rs 250 to Rs 9,690 per 10 gm. However, gold trading in Mumbai saw a dip today due to blasts.

Spot gold at the MCX increased from Rs 9,431 to Rs 9,703 per 10 gm. Gold futures for August and October delivery increased from Rs 9,605 and Rs 9,624 to Rs 9,693 and Rs 9,831, respectively.

Silver price also followed the gold rally. Spot silver at the MCX increased from Rs 17,228 to Rs 18,020 per kg. Silver futures for September and December delivery increased from Rs 17,800 and Rs 18,170 to Rs 18,065 and Rs 18,450 respectively.

"The price rise was primarily on account of yesterday's blast and partly due to increased buying in Japan," said Suresh Hundia, owner of Hundia Exports and former president of Bombay Bullion Association.

New York Mercantile Exchange crude oil for August delivery closed higher at $74.16 per barrel, up by 55 cents from the previous close.

Yesterday, it traded on the up side, and it is expected to continue on the same trend and touch $75 per barrel levels soon.

The probability of UN sanctions on Iran, the fourth largest producer of oil, will keep crude prices firm and be a contributing factor for the expected rally in gold, said a Karvy Commodities analyst.