Gold futures zoom to Rs16,349 per 10 gm on MCX

Gold prices surged to a new peak at Rs16,349 per 10 gm in futures trade on the Multi Commodity Exchange of India (MCX). The August contract for gold rose 2.55 per cent to hit Rs16,349 per 10 gm as traders increased their exposure to the safe haven asset following a fall in the stock and forex markets.

The precious metal, which has been rising in the domestic market for most of the current week, received a major boost from the firming global trend. Gold prices in the US surged to $1,007.20 an ounce last night.

Spot gold also firmed up in the domestic market with prices climbing to Rs 15,750 per ten gm in Delhi and Rs15,775 in Chennai.

Buyers, however, stayed on the sidelines despite the wedding season. Trades said there were more sellers for scrap than buyer for jewellery, after prices crossed the Rs15,500 mark.

Traders said most of the local demand is being met by scrap, restricting demand for imported new bars. Gold imports into the country are expected to fall for a second month in a row with no imports so far in February, according to the bullion association.

While physical gold buying in the country declined, purchases of paper gold, or exchange-traded funds, have shot up over the past week.

Local spot gold prices were ruling around Rs14,200 per 10 gm the week before.