Domestic gold prices shot above Rs 14,000-mark on Wednesday as frenzied investors moved money out of the melting global equity markets. A weaker rupee also pushes up import cost of the yellow metal as it is paid for in dollars.
“The price movement is in tandem with international trend,” said Suresh Hundia, president, Bombay Bullion Association.
“Uncertainty in the global economic space has seen the demand for gold rise. A weaker rupee also aided prices.”
The approaching festival season has seen fewer takers for the yellow metal though. "There is not much buying happening for festivals," said Hundia. "At large, it is investors and traders who are following the international price trends in the domestic market." Gold prices gained more than two per cent in overseas markets as investors sought the safety of yellow metal to survive a global financial slowdown, setting the trend for domestic markets.
Gold has gained 22.5 per cent in less than a month following the collapse of Wall Street's banking giants.