Gold surge to near records on frantic buying

Gold prices surged to near record levels by adding Rs 155 to settle the day at Rs 15,650 per ten gram in the bullion market here on frantic buying by stockists and jewellers influenced by a firming trend in overseas markets.

The precious metal had touched an all-time high of Rs 15,750 per ten gram on February 18, with the prices in international markets zooming to an 11-month high of $1,006.29 an ounce.

Marketmen said buying activity in precious metals picked up as equity and forex markets turned volatile, leaving no other opention for investors but to park their funds in bullion as safe a hedge.

Silver also joined the upward march by spurting Rs 550 to Rs 22,100 per kg on on brisk buying as stockists and industrial units felt a constant fall in last few sessions was excessive amid turmoin in global fianncial markets.

 Bullion, which normally moves in tandem with the global trend, rose by $14.35 to $956.70 an ounce and silver added 1.8 per cent to $13.35 an ounce. In London, the gold tumbled 5.1 per cent last week to $927.76, the lowest since Feb 11.

The rupee falling to record lows against the dollar also made the US currency precious metals more costlier, they said.

Overseas investors, the major market players were hurt following reports the US Commerce Department said gross domestic product contracted at a 6.2 per cent annual pace in the fourth quarter, the fastest in 26-year, they added.

Market participants said the expectations running high as the metal likely to set new record high levels over Rs 16,000 per ten gram as most of the other investment avenues almost losing attractions.

"While stock markets plunging to their lows and sale of houses negligible, the general investors are looking for a safe hedge for their money," said leading bullion merchant Ravi Jalan. "gold may see some new levels over Rs 16,000 soon."

The precious metal is rising purely on speculation and market is hardly witnessing any physical buying of jewellery, said Rakesh Anand of R K Jewellers.

Standard gold and ornaments shot up by Rs 155 each at Rs 15,630 and Rs 15,480 per ten gram respectively. Sovereign held unchanged at Rs 12,400 per piece of eight gram.

Silver ready shot up by Rs 550 at Rs 22,100 per kg while weekly-based delivery zoomed by Rs 800 t Rs 22,615 per kg on speculative supplort. Silver coins, however, eased by Rs 100 at Rs 28,500 for buying and Rs 28,600 for selling of 100 pieces.