Strong signals from overseas markets pushed gold prices up by `700 on Friday. This is the yellow metal’s biggest single day gain this year.
Investors’ preference to gold over equity markets owing to deepening Eurozone crisis is seen as the main reason behind this rally.
Gold prices touched Rs 29,320 per 10 grams, a level last seen on May 8. Silver prices too spurted by Rs 1,400 to Rs 54,000 per kg on increased offtake by industrial units and coin makers.
Traders said sentiment turned bullish after gold rose by 0.9 per cent to USD 1,587.85 in London spurred the demand for the metal as a protection of wealth.
Silver prices also rose by 1.2 per cent to USD 28.38 an ounce in London. As per a recent Assocham estimate, domestic gold prices is expected to cross Rs 30,000 per 10 grams in the next three months, registering a strong recovery due to slowdown in inflows by foreign institutional investors and poor response in realty sector. Besides, gold imports in India are also pegged to touch 1,000 tonnes in 2012-13.