Gold prices breached the psychological Rs 30,000 barrier in first hour of trade on the Multi Commodity Exchange on Friday. A sharp rise in prices in global markets and continued depreciation in the Indian rupee pushed up the gold prices, analysts said.
Gold prices are now trading near a 6-month high. Gold prices last traded above the Rs 30,000 mark on February 27, 2013.
Commodity trading strategist Chirag Kabani told NDTV that gold prices have jumped tracking U.S. bond yields, which hit a 52-week high on strong U.S. data. Traders are concerned that the U.S. Federal Reserve could soon start tapering its massive stimulus leading to outflows from risk assets such as stocks to safer assets such as gold.
Gold futures for August delivery traded 3.5 per cent or Rs 1,013 higher at 30,199. Silver for August delivery traded at Rs 49,564, rising 6.5 per cent or Rs 2,991 per 1 kg as of 11.21 a.m.
Gold was holding near two-month highs in global markets and was headed for its best weekly gain in over a month, while silver prices traded near a three-month high.
Dharmesh Bhatia of Kotak Securities told NDTV that the hike in import duty on gold from 8 per cent 10 per cent and the sharp fall in the rupee will continue to drive gold and silver prices.
The rupee breached the 62 mark against the U.S. dollar today, surpassing the previous all-time low of 61.80 hit just last week.
"The trend will continue to be bullish. We are expecting 4-5 per cent rally in gold and silver prices," Mr Bhatia added.
A firming trend in the domestic spot markets ahead of the upcoming festive and marriage season led to covering up of short positions by speculators driving prices higher, traders added.
(With inputs from Reuters)