Gold up 2.75% on firm global guidance

Standard gold prices surged 2.75 per cent today on increasing appeal for the yellow metal in foreign markets due to the deepening Greek sovereign debt crisis. 

Speculators sought refuge in the yellow metal as a safe investment, despite a strengthening dollar. Standard gold in Mumbai’s Zaveri Bazar closed at Rs 17,950 per 10 gm, as against Rs 17,470 per 10 gm the previous day. Gold futures for delivery in December hit a five-month high, surpassing Rs 18,000 per 10 gm on the MCX in early afternoon trade. The metal traded at Rs 18,126 per 10 gm on firm overseas guidance. 

The metal remained volatile in the London spot market, falling to $1,195 an oz early Friday from the close of $1,108 an oz the previous day. On Thursday, it had hit $1,210 an oz. 

Prithviraj Kothari, director of bullion trader Riddhi Siddhi Bullion Ltd, said gold was passing through a critical phase. 

Meanwhile, high prices may hit buying sentiment on the occasion of Akshaya Tritiya, one of the occasions on which Hindus believe buying gold can add to their prosperity. Kothari believes gold sales may halve to around 20 tonnes this Akshaya Tritiya (on May 16 this year), from 45 tonnes a year earlier.