There seems no let-up in the spiralling gold price movement. The metal hit a new record and hit the Rs 21,000 per 10 grams mark in the futures market on Tuesday and touched Rs 20,600 per ten grams in the spot market in Delhi as it rose by Rs 265 per ten grams.
Silver too traded strong and it rose sharply during the day by Rs 1,800 per kg to an all time high of Rs 41,700 per kg.
Experts say that the yellow metal that has witnessed a strong demand in the physical form in the festive season is likely to trade strong as the Hindu marriage season is approaching and there is a rally in the gold prices globally where it climbed to $1413 per ounce.
“The markets worldwide reacted to the news that China may bring in control on the capital inflows and that led to a rise in the prices,” said Ritesh Jain, head of fixed income at Canara Robeco Mutual Fund.
Renewed concerns over high sovereign debt in euro zone countries such as Ireland and Greece and inflationary pressures also fuelled the price rise of precious metals.
Experts say that the rise in the prices is a result of the demand for physical gold and also lot of global money flowing into gold as countries are not willing to let their currencies appreciate.
“There is lot of money flowing in the market worldwide and a part of it is flowing into gold as countries are not willing to let currencies rise,” said Jain.
Gold prices in Indian markets have risen by 23% over the past one year and market players say that the strength in prices will continue.
“I expect the gold price in the global market to cross Rs 25,000 per 10 grams over the next couple of years because even if a small fraction of the large global money finds its way into gold, it will have a significant impact on gold prices,” said a gold expert who did not wish to be named. “however I expect a correction in prices in the near term.”