Gold prices today surged by Rs 640 to Rs 31,470 per ten gram in Mumbai on sustained buying by stockists and investors.
The rally in precious metals sparked after the rupee plunged to an all-time low of 61.65 against the American currency, raising fears that the dollar-denominated metal would become costlier and restrict supply into the market after RBI prohibited inward shipment of gold coins.
Market sentiment was further influenced as investors rushed to bullion as a safe haven following free fall in equities and rupee. A firm global trend was another positive factor.
“Melting equities and depreciating rupee have left no other option for the investor fraternity but to park their funds in bullion,” said Surender Jain, Vice-President of All India Sarafa Bazar.
Restricted supply after the Government increased the import duty on the metal to 10 per cent on August 13 and firm global cues supported the upsurge in the metal, he added.
The latest measures by RBI and the Government are part of a series of steps taken to curb gold import, a major contributor to the widening current account deficit.
Silver followed suit and shot up further by Rs 1,505 to Rs 51,485 per kg on increased demand from industrial units and coin makers.
In the Capital, gold of 99.9 and 99.5 per cent purity advanced by Rs 515 each to Rs 31,525 and Rs 31,325 per ten grams, respectively.
Sovereign followed suit and climbed by Rs 200 to Rs 24,900 per piece of eight gram.
Similarly, silver ready added Rs 1,365 to Rs 50,685 per kg and weekly based delivery by Rs 1,315 to Rs 50,535 per kg, after a steep rise of Rs 3,270 in the previous session.
Silver coins spurted by Rs 1,000 to Rs 87,000 for buying and Rs 88,000 for selling of 100 pieces.