Gold prices shot up on Wednesday to Rs. 30,745 for 10 grams, just Rs 5 behind its June 19 all-time high, as investors shifted funds to the yellow metal on global cues and a weakened dollar.
Industry experts said the prices were also increasing in India on the expectation that the demand for gold may jump during the marriage and festival season.
Gold futures too recorded an increase to touch Rs. 30,719 for 10 grams. In India, the price of gold has gone up by around 35% in the last one year.
“Stimulus measures and expansionary policies by central banks of major economies have lifted up gold prices to trade above Rs. 30,000,” said Nitin Nachnani, research analyst at Geojit Comtrade.
Gold demand in August is expected to be down by 50% at 30-35 tonnes from over a year ago period, said Prithviraj Kothari, president, Bombay Bullion Association.
“There has been sluggish demand for gold in the country because of prevailing high prices. Wednesday’s increase in prices would further affect sales ahead of the marriage season,” he said.
According to analysts, inves-tors have started shifting funds from equities to bullion and the rupee depreciation to the 55-to-a-dollar level have also led to a spurt in landed cost of domestic gold prices.
Gold demand in India, the world’s largest consumer, has been stymied in the last few months by a hike in import duties and record-high local prices because of a weak rupee.
In a recent report, the World Gold Council had pegged gold demand in India to be down at 650-750 tonnes this year from 933 tonnes in 2011.
(with inputs from PTI)