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Safe-haven scramble sends gold soaring

Mumbai, Jan. 6: Safe-haven gold scaled a new all-time high of Rs 5,730 at close of trade on the bullion market today, as investors piled the precious metal amid mounting global, political and economic convulsions.

The yellow metal soared a whopping Rs 80 per 10 grams, breached key resistance levels and surpassed the earlier life-time highs of Rs 5,713 on February 13, 1996, while it scaled an eight-year high of $ 354 an ounce in other Asian markets. Silver prices also strengthened in unison. Ready silver (.999 fineness) also moved up by Rs 30 per kilo to Rs 8,170 from Rs 8,140.

The main reason behind the steep rise in prices of the yellow metal was apprehension of a potential US-led attack on Iraq, as speculators reinforced gold’s status of a safe-haven investment in a war-like crisis, a dealer said, adding “North Korea’s resumption of its nuclear program and the latest suicide bombing in Tel Aviv further ignited trouble spots in West Asia.”

In Delhi, standard gold and ornaments gained another Rs 10 each at Rs 5,710 and Rs 5,560 per 10 gram respectively, while sovereign held unchanged at Rs 4,450 per piece of 8 gram.

Silver ready also joined the bullish trend and gained another Rs 65 at Rs 8,090 per kilo and weekly-based delivery by Rs 45 at Rs 8,080 per kilo. Marketmen said buying in gold picked up ahead of the marriage season. They added trading sentiment was also bolstered by the steep rise in gold prices in international markets, particularly after it shot up to open higher around $ 356 an ounce in London.

In Calcutta, standard gold (10 gms) was selling at Rs 5,770, while 22 carat gold was quoted at Rs 5,450.

Meanwhile, spot gold roared to $ 353.75 an ounce in Asian trading, its firmest level since March 1997 and up from Friday’s New York closing level of $ 350.90/351.50.

Bullion is 27 per cent higher than this time last year, making it one of the best performing financial assets during a prolonged stock market downturn, a fragile dollar and a host of geo-political tensions.

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