Gold sets new record at Rs 14,550

Gold sky-rocketed to a record-high level of more than Rs 14,500 per 10 gm in the national capital On Wednesday on frantic buying by stockists and jewellery fabricators, triggered by firming global trends.

The precious metal spurted by Rs 310 at Rs 14,550 per 10 gm, a level never seen before, following reports that gold in overseas markets advanced for the first time in three days on concerns that the global economy will deteriorate, lifting demand for the commodity as a haven.

The international gold markets, which normally determine prices on the domestic front here, turned extremely bullish after it surged to $913.70 an ounce on the New York Mercantile Exchange, up from $892.40.

US President Barack Obama said the American economy faces a “full-blown crisis” and government action is necessary now to put people back to work.

An ongoing heavy marriage season here further boosted demand for gold among jewellers.

Market players in world bullion markets are optimistic that the metal would remain on a record-making-and-breaking spree for another three months, before setting a new peak.

Global players such as Goldman Sachs, UBS and funds backed by bullion expect gold prices to soar to $1,000 an ounce by April.

On the domestic front, jewellers and bullion traders say the precious metal may touch the Rs 16,000 per 10 gm level in the next three months.

“Currently, gold prices are extremely volatile. Within a week or so, prices would hover in the horizon of Rs 15,000 per 10 gm level. It may not be a surprise to see gold prices at Rs 16,000 per 10 gm in the next three months,” Gitanjali Group Chairman Mehul Choksi said.

Uncertainty in the global financial market and the rupee movement will be key drivers for gold prices, he said, adding that there has not been a significant fall in demand in his stores due to price rise.

Goldman Sachs and UBS raised their forecast for gold citing increased risk in financial markets and mounting concern that government spending on bank bailouts and economic stimulus will spur inflation.

Gold will touch a record this year as efforts to stem a worsening financial crisis spark “explosive” inflation, Van Eck Associates gold-fund said.

Holdings in the SPDR Gold Trust, the largest exchange- traded fund backed by bullion, also extended gains to a record 881.67 tonnes.