Gold prices surged over 1 per cent to Rs 30,308 per ten gram in futures trade today as speculators indulged in building up fresh positions amid a firming trend overseas as the US Federal Reserve unexpectedly refrained from cutting economic stimulus.
At the Multi Commodity Exchange,metal prices for delivery in October went up by Rs 318,or 1.06 per cent,to trade above Rs 30,308 per ten gram,in a turnover of 868 lots.
On the similar lines,the metal prices for delivery in far-month December shot up by Rs 163,or 0.88 per cent,to Rs 30,110 per 10 gm,in a business volume of 121 lots.
Analysts attributed gains in the precious metal at futures trade to a firm trend in the overseas markets as the Federal Reserve decided to keep its stimulus programme intact,raising demand for the precious metal.
Besides,hike in import duty on gold and silver jewellery to 15 per cent from 10 per cent by the government,also influenced prices,they said.
Globally,gold soared by USD 55.30,or 4.22 per cent,the most since June 1,2012,to USD 1,365.30 an ounce in New York yesterday.
Singapore: Spot gold traded near a one-week high on Thursday after the US Federal Reserve surprised markets by postponing a wind-down of its commodities-friendly monetary stimulus and the dollar tumbled to seven-month lows.
US gold futures jumped as much as 4.6 percent on the decision,while silver futures gained 7 percent,tracking spot prices’ gains from the previous session.
The absence of key buyer China,which is closed for the Mid-Autumn Festival holiday,kept gains in check.
Fed Chairman Ben Bernanke on Wednesday refused to commit to begin reducing the bond purchases this year,and instead went out of his way to stress the program was “not on a preset course”. In June he had said the Fed expected to cut back before year end.
Many economists had expected a $10 billion reduction to the bank’s $85 billion monthly bond purchases.
“It’s quite surprising given what they have said before. That’s why there is a big impact on precious metals,” said Dick Poon,general manager of refiner and dealer Heraeus Metals in Hong Kong. “But I don’t see a strong rally as there is not much demand.”
Traders said though there were chances of a short-covering rally because of the Fed’s turnaround,they were not very optimistic about a sustained rise in prices.
Gold,often seen as an inflation-hedge and safe-haven investment,has fallen nearly 20 percent this year on fears of an end to easy central bank money that had propelled it to record highs in 2011.
After the Fed said it would stick to its stimulus plan for now,gold gained more than 4 percent on Wednesday,leading the rally in commodities.
Spot gold eased 0.4 percent to $1,359.10 an ounce by 0329 GMT after earlier hitting $1,367.86,its highest since Sept. 11.
US stocks rallied to record highs after the Fed’s decision,while the dollar and bond yields tumbled.
“With the decision for no taper for now,markets will revert back to data-watching,but odds still remain (albeit more muted) for a taper before year-end,data-willing of course,” OCBC Bank said in a note.
The outlook for demand in India and China during the peak season that begins later this month is also weighing on gold prices.
Volatility in prices is keeping buyers away in China,while in India government restrictions on imports are curbing supply.
India’s gold imports could be 750 tonnes in the current fiscal year ending March 31,2014,a government official said,down 11 percent from last year as official measures curb purchases in what has been the world’s biggest bullion buyer.