Mumbai: Gold prices shot up to reclaim the psychologically significant Rs 28,000 barrier, its highest level in more than a year, as frenzied buying continued unabated at the domestic bullion hub here.
Tracking the general positive trend, silver too surged ahead to reclaim the key Rs 37,000 mark following aggressive speculative as well as industrial off-take.
Active buying interest from jewellery traders and retailers ahead of peak wedding season mainly supported the rise even as speculators created huge positions, tracking a firming global trend.
Sentiment turned highly buoyant after gold jumped to fresh eight-month high in overseas markets to break the key resistance of $1,200 an ounce on the back of hectic buying from ETFs and investors after global equities once again came under intense selling pressure combined with falling oil prices.
Standard gold (99.5 purity) soared by whopping Rs 430 in opening trade to Rs 28,205 per 10 grams, a the level not seen since January 31, 2015, as compared to overnight close of Rs 27,775.
Pure gold (99.9 purity) also jumped by a similar margin to Rs 28,305 per 10 grams as against Monday’s finish of Rs 27,925.
Silver (.999 fineness) powered by a massive Rs 1,010 to Rs 37,400 from Rs 36,390 on Monday.
The ongoing rally in gold at the local market has been predominantly propelled by intensified speculations against the backdrop of jubilant sentiment overseas, where the metal is on a roll led by another round of financial market sell-offs worldwide, a bullion trader said.
Macroeconomic imbalances in the face of China-led global slowdown fears as well as geopolitical tensions will drive prices higher in the long term worldwide, he added.
Overseas, spot gold traded at $1,192.40 an ounce after climbing $1,200 an ounce level overnight, while silver quoted at $15.34 an ounce.
(With inputs from agencies)