Gold up Rs 535 on global cues, silver gains Rs 1,770

Gold surged by Rs 535 to Rs 28,305 per 10g on Friday on frantic buying by stockists and jewellers for the marriage season, amid a sharp rally in global markets.

Silver followed suit and spurted by Rs 1,770 to Rs 56,970 a kg on increased offtake by industrial units and coins manufacturers.

The Trading sentiment for gold bolstered as it rose to a seven-week high in global markets as the US Fed keeping the borrowing costs low drove the dollar down, increasing demand for bullion as alternative assets.

Fed policymakers said they probably would keep key US interest rate targets near zero until at least 2014. Fed Chairman Ben Bernanke said the central bank was ready to offer additional economic stimulus. The news cheered gold investors, who have long feared that the precious metal's rally would be stressed by a US rate hike, which would lift both the dollar and the opportunity cost of holding non-interest bearing bullion.

 

Last night in New York, gold gained 1.6 per cent to $1,729.90 an ounce, the highest since December 7 and silver by 1.9 per cent to $33.74 an ounce.

In addition, fresh buying by jewellery-makers and retailers for the marriage season further fuelled the upswing in precious metals.

On the domestic front, gold of 99.9 and 99.5 per cent purity surged by Rs 535 each to Rs 28,305 and Rs 28,165 per 10g, respectively. Sovereigns gained Rs 50 to Rs 23,350 per piece of eight grams. In a similar fashion, silver for weekly-based delivery rose Rs 625 to Rs 56,400 a kg.