Gold surges,silver nears record level

Festive season demand drove gold prices up by Rs 10 to Rs 20,350 per 10 grams in the national capital.

Festive season demand drove gold prices up by Rs 10 to Rs 20,350 per 10 grams in the national capital,while silver jumped by Rs 1,070 to the near record level of Rs 41,500 per kg on sustained offtake by industrial units.

Amid the busy marriage season,buying activity gained momentum on the back of surge in the price of gold in international markets,driven by dollar weakness and the heightened attractiveness of commodities as an alternative investment avenue after heavily indebted Ireland toned down its opposition to a European Union-led financial bailout.

Gold in overseas markets,which normally sets the price trend on the domestic front,gained USD 7.50 to USD 1,361 an ounce,while silver jumped by 1.6 per cent to USD 27.39 an ounce.

Marketmen said the reports of a firming overseas trend came at a time when the bullion market is passing through a bullish phase as retailers tried to cash in on the marriage season.

8220;Current demand for the precious metals for the marriage season and investors shifting from melting stocks to firming bullion is a strong factor for the market,8221; said Delhi-based bullion merchant Rakesh Anand.

He said the precious metal might also gain support from positive US economic data and the Federal Reserve8217;s move to buy securities worth USD 600 billion,which could further depress the value of the American currency.

In the national capital,gold of 99.9 per cent purity gained Rs 10 to Rs 20,350 per ten grams,while gold of 99.5 per cent purity rose by Rs 20 to Rs 20,230 per ten grams. The metal had surged by Rs 120 in Thursday8217;s session.

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Sovereign prices,however,remained flat at Rs 16,400 per piece of eight grams in restricted buying.

In line with the general firming trend,silver ready surged by Rs 1,070 to Rs 41,500 per kg and weekly-based delivery by the same margin to Rs 40,940 per kg. Silver prices had scaled a peak of Rs 41,700 per kg on November 9.

Silver coin prices also rose by Rs 100 to Rs 44,000 for buying and Rs 44,100 for selling of 100 pieces.