Gold hits Rs 10,000 on global oil turmoil

Record crude prices fueled gold prices which opened firm in Mumbai but failed to sustain the high levels towards the end of the day on account of a stronger rupee.

The yellow metal opened at Rs 10,000 per 10 grams on firm international guidance in early trades on Friday but closed lower at Rs 9,990, Rs 15 higher than previous day.

The metal hit a 27-year high in early London trades at $777 per ounce on rising crude oil prices which jumped to all-time highs at $92.

Bhargav Vaidya, a precious metals analyst, believes gold is following crude and is likely to revert only after hitting the $820 benchmark in the near future.

Gold futures on MCX are also quoting up by Rs 85 with the near month contract quoting at Rs 9,913 per 10 grams, while the far month futures are still hovering above Rs 10,000.

In the spot market, however, gold prices were ruling at Rs 10,300 per 10 grams (including one per cent value added tax), sufficient reason for traders to take out scrap and book profit.

"Gold is increasingly becoming unaffordable for the largest consuming sector - the average middle class - because of overheating prices," said a trader.

The lacklustre festival demand has lead domestic jewellers, especially in Chennai, India's largest gold consumer city, to replace virgin gold jewellery with scrap without loss in weight and changes.