Gold price surges INR 2,600 to hit fresh peak of INR 1.26 lakh/10 g

NEW DELHI — Gold prices rallied for the third straight day and gained INR 2,600 to hit a fresh lifetime high of INR 1,26,600 per 10 grams in the national capital on Wednesday in line with strong global trends amid looming geopolitical uncertainties triggered by the prolonged shutdown of the US government.

The precious metal has added INR 6,000 in the past three days as global risk-aversion has prompted investors to rush for safe haven assets.

According to the All India Sarafa Association, gold of 99.9 per cent purity had closed INR 700 higher at INR 1,24,000 per 10 grams on Tuesday, a day after registering a steep surge of INR 2,700 on Monday.

On Wednesday, the yellow metal of 99.5 per cent purity appreciated by INR 2,600 to touch an all-time high of INR 1,26,000 per 10 grams (inclusive of all taxes) in the local bullion market.

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It had settled at INR 1,23,400 per 10 grams in the previous market session.

Analysts said the ongoing US government shutdown and rising global geopolitical tensions have fuelled the flows into the safe haven asset.

In addition, silver prices surged by INR 3,000 to trade near its record high at INR 1,57,000 per kilogram (inclusive of all taxes) on Wednesday. The white metal had ended at INR 1,54,000 per kg on Tuesday.

The white metal had hit a record high of INR 1,57,400 per kilogram on Monday.

In the overseas markets, bullion prices witnessed robust traction. Spot gold went up nearly 2 per cent to hit a record high of USD 4,049.59 per ounce.

"Spot gold climbed above the key USD 4,000 per ounce-mark for the first time, driven by safe-haven demand amid concerns about the US economy and the government shutdown.

"Geopolitical tensions in Ukraine, political instability in France and Japan, and rising expectations of Fed rate cuts amid ongoing data blackout also supported upside," Kaynat Chainwala, AVP Commodity Research, Kotak Securities, said.

Spot silver rose more than 2 per cent to hit a high of USD 48.99 per ounce in the global markets.