Gold prices spurt on global cues

New Delhi-India (July 31)  Gold prices surged to a 29-month high of Rs 31,340 at the bullion markets today, tracking a firm overseas trend and increased buying by jewellers at the domestic spot market.

In the national capital, gold of 99.9 per cent and 99.5 per cent purity soared Rs 540 each to Rs 31,340 and Rs 31,190 per 10 grams, respectively, a level last seen on February 26, 2014, when it had stood at Rs 31,530.

Bullion traders said sentiments were bolstered after gold gained overseas as the dollar weakened and the US economy grew less-than-expected in the second quarter, boosting demand for safe-haven assets.

Globally, gold rose 1.2 per cent to $1,357.50 an ounce in New York yesterday. Prices have climbed 2.8 per cent this month.

Persistent buying by jewellers following a pick-up in demand for ornaments at domestic spot market also supported the upside.

Sovereign also shot up Rs 300 to Rs 24,300 per piece of 8 grams.

On the other hand, ready silver took losses forward on easing demand from coin makers and lost another Rs 220 to Rs 47,080 per kg, while silver week-based delivery recovered by Rs 680 to Rs 47,480 on speculative buying. Silver coins, however, continued to be traded at the previous level of Rs 76,000 for buying and Rs 77,000 for selling of 100 pieces.

In Calcutta, 24-carat gold rose Rs 300 to Rs 31,760 per 10 grams, while 22-carat gold was up Rs 285 to Rs 30,130 per 10 grams.

The World Gold Council (WGC) had earlier said it expected demand to rise over 10 per cent in 2016, even after a 39 per cent fall in the January-March (first) quarter, as a good monsoon and a sustained rally will boost purchases as well as investment in the yellow metal.

The WGC has forecast India's full-year demand in the range of 850-950 tonnes compared with 848.9 tonnes last year.

Demand for gold in India was hit in the first quarter because of various reasons, including a jewellers' strike, a rise in price, an expectation of a cut in customs duty and the decision to make PAN compulsory for purchases above Rs 2 lakh.

Gold imports had plunged 38.54 per cent to $1.2 billion in June compared with $1.96 billion in June 2015.

The precious metal is the second-highest component of the import bill after crude oil.

Sovereign bond scheme

The government has realised Rs 919 crore through the fourth tranche of its sovereign gold bond scheme - the highest so far.

The previous highest was Rs 746 crore, which was realised in the second tranche, when the issue price was Rs 2,600 per gram of gold.

In the latest subscription, the issue price was fixed at Rs 3,119. This time around, the amount was mobilised through over 1.95 lakh applications, representing around 2.95 tonnes of gold.

These numbers are likely to go up as receiving offices are keying in data for a huge number of applications received on the last day.

Source: TheTelegraph