Gold prices on Monday surged an all-time high of Rs29,590 per 10 grams on good investment demand driven by both global and local factors. However, domestic traders are worried over poor offtake owing to high prices.
In Chennai, ornamental gold (22-carat) rose by Rs80 to touch Rs22,000 per sovereign (8 grams). For one gram, the 22-carat variety was sold at Rs2750 and 24-carat at Rs2941 on Monday.
Silver prices too shot up by Rs400 to Rs 56,900 per kg on rising demand from jewellery and coins makers.
Deepening euro-zone debt crisis boosted demand for alternate investment in gold which saw the metal prices zoom in international markets. In London, gold gained 0.1% to $1,665.23 an ounce. MCX gold futures climbed to Rs30,247 per 10 grams for December delivery.
The 15% depreciation in the value of the rupee against the dollar since September 2011 is aiding the upswing in gold prices, said bullion traders.
However, rising gold prices worry local traders. “Already, there is poor demand owing to high prices, Even Akshaya Tritiya sales weren’t very encouraging,” said Mr N. Anantha Padmanabhan, regional chairman of GJF. “With no marriages in May, such a price rise may not augur well for traders,” he added.
With gold prices shooting up day-by-day, marriage buying of gold seems to have taken a severe beating. Most jewellers are fully stocked after lower-than-expected sales on the auspicious Akshaya Tritiya day.