Mumbai: Rallying higher for the second straight day, gold prices in the domestic market scaled above the Rs 29,000-level mark on Wednesday as yellow metal firmed up further in the international market amidst growing concern regarding global growth slowdown. The depreciation of Indian rupee against the US dollar further helped gold to maintain its winning momentum.
Standard gold (99.5 purity) surged by Rs 365 to finish at Rs 29,085 per 10 grams as against its previous days close of Rs 28,720. Similarly, the pure gold (99.9 purity) climbed by a similar margin to close at Rs 29,235 per 10 grams.
According to bullion traders, the growing unease in the global markets following persistent weakness in crude oil prices and fears about Britain exiting the European Union have caused serious risk aversion due to which investors are flocking towards safer assets like gold and US treasury bonds.
“Money is now moving towards gold as sluggish equity markets and concern regarding China led global economic slowdown have led to huge risk aversion in global markets,” C.P. Krishnan, whole time director, Geojit Comtrade.
Investors are expecting better returns from gold as equity markets have remained sluggish while the prices of commodities including crude oil are marching downwards amidst weak demand. “If weakness in rupee continues and yellow metal rallies higher in global markets, we can see gold hitting Rs 30,000- Rs 31,000 per 10 gram in the domestic market,” he added.
