Gold prices scale new peak in India

Potential buyers of gold in India remained on the sidelines, as the yellow metal continued to scale new peaks, notwithstanding some softening in the international market from a seven-month peak. Record high prices are hurting gold demand and imports. Everybody is just waiting for a correction. There are hardly any buyers and all are sellers. The flow of scrap gold continues as consumers cash in on record high prices. Demand for the yellow metal picked up due to weakness in global equity and currency markets.

Gold's status as a safe haven asset class has also increased its appeal among risk averse global investors as the global economic slump shows no sign of easing. Local gold prices crossed Rs15,000 per 10 gram in Mumbai and was trading close to Rs16,000 in Kolkata and New Delhi. The benchmark April contract was trading 1.2% higher at Rs15,645 per 10 grams at 2:10 p.m. on Friday, after having struck a new record high of Rs15,706 in the previous session.

In the international market, gold futures breached US$1,000 an ounce, as investors sought a store of value and bullion holdings in exchange-traded funds soared to records. Spot prices, heading for a second weekly gain, are up 11% this year, compared with a 15% loss in the MSCI World Index. Bullion reached a record US$1,032.70 in March