Gold shoots up by Rs.840; regains Rs.27,000 mark

The price of gold shot up by Rs.840 Tuesday, in its biggest single-day gain in this year, helping the precious metal to regain its Rs.27,000 mark per 10 grams.

This buoyancy can be attributed to the rebound in the global market and also good demand in the domestic market due to the wedding season.

Gold price was hovering around Rs.27,040 per 10 grams in the national capital.

Silver also recorded a gain of Rs.2,700 and reached Rs.37,000 per kg on increased offtake by industrial units and coin makers.

"This is just a temporary phase. Gold prices will again go down. It is on the expected lines," Harshad Ajmera, proprietor, JJ Gold House, told IANS.

The central bank had eased curbs on gold import and scrapped the 80:20 scheme Nov 28.

Under the 80:20 scheme, 20 percent of the imported gold had to be exported before getting a new lot. The scheme was put in place in August 2013 to curb gold imports, which was considered a major cause for the widening current account deficit of the country.

RBI Governor Raghuram Rajan Tuesday said the decision to scrap 80:20 scheme was a "reasonable" one.

"The government decided that it was probably best at this point to scrap the rule and it has been scrapped," he said during a media interaction after the policy announcement on rates.

"Of course, there are now further requests to change the duty structure that the government will review in its own good time and decide ... I think the decision is reasonable and let us see how it plays out," he added.