| On a spiral
Mumbai, Dec. 13: A steep global rally today spurred domestic gold prices that saw the yellow metal glitter at a six-year high of Rs 5,450, a rise of Rs 110 per 10 gram over its previous close. Prices in early London trade shot up to a three-year high.
The sudden spurt in international prices has been attributed to several reasons—chief among them being the weakening of the dollar vis-à-vis the euro and prospects of a war in Iraq.
Standard gold opened sharply higher at Rs 5,400, closing at a six-year peak of Rs 5,450. The all-time high for the metal is Rs 5,713 recorded on February 1996. It shot up to Rs 5,480 per 10 gram in the capital from the previous level of Rs 5,335 while in Calcutta, it rose to Rs 5,520 from Rs 5,430.
“Prices prevailing here will be entirely dependent on the trend overseas,” an analyst said.
The 10-tola gold bar (.999 purity) also resumed smartly high at Rs 63,250 and finished at Rs 63,800, a jump of Rs 1,300 over the previous close of Rs 62,500.
Silver also showed a bullish trend with ready silver (.999 fineness) opening higher at Rs 7,970 and closing at Rs 8,020, a rise of Rs 125 over the last close.
On the global markets, gold rose to its highest in five-and-a-half years as a strengthening of the euro and yen against the dollar made it cheaper for investors holding those currencies to buy the dollar-denominated metal.
The dollar fell to its weakest in almost three years against the euro and dropped against the yen on concerns the pace of a rebound in the US economy was faltering. Gold was also buoyed by growing tension over United Nations arms inspections in Iraq, where military action could disrupt oil supplies and hurt global economies, making gold more attractive as a haven.
While the metal touched a high of $ 332.10 per ounce in New York, it shot up to 334.50-335.50 an ounce in Hong Kong, touching $ 333.50 in London. It last hit the $ 335 level in September 1998.