A depreciating rupee and the demand for gold in the wedding season sent prices of the yellow metal flying to their all-time high on Monday even though global prices are way off the peak.
Causing concern among buyers, gold touched Rs 29,490 per 10 gramme in the wholesale market compared to the previous all- time high of Rs 29,516 in mid- November last year.
Retailers in Mumbai and Bangalore sold 24 carat gold at over Rs 30,000 per 10 gramme, including taxes.
The price is expected to remain at this level till May 17, when the marriage season will conclude, according to dealers and jewellers.
“The demand for gold has gone up due to the wedding season and adding to this, the rupee is weakening. Consequently, the price of gold today touched its all- time high though in the overseas market, it is way off the mark,” said bullion expert Vijay Bhambwani, chief executive officer, BSPLIndia. com.
The rupee, whose value has been falling for the past few days due to weak economic data, depreciated on Monday by 19 paise to close at 52.73 against the dollar.
In last September, international gold prices touched all-time high of $ 1,920.3 per ounce. “ In India, prices have hit the roof as taxes have made gold expensive compared to the previous peak. Besides, the weakening rupee is adding to the effect,” said Siddharth Mehta, chief strategist, Rajesh
Exports, India’s biggest gold importer and exporter.
Jewellers in Mumbai said there has been a sudden spurt in the demand of gold due to the wedding season, and the shortage of supply due to import duties caused prices to rise. “ People are sacred to import gold as prices may crash. The levy of import duty has caused concern among speculators,” a dealer said on the condition of anonymity.
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