Gold at Rs 18k on wedding demand

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New Delhi: Gold struck another historic peak of Rs 18,000 per ten gram in the national capital today on sustained buying by stockists for the current marriage season amid a weakening dollar and reports that more central banks might purchase gold from the IMF.

The yellow metal spurted by Rs 220 to Rs 18,000 per ten gram, a level never seen before, on seasonal buying and as prices in international markets touched record levels with the dollar extending its losses.

Traders said a weak dollar made the precious metal cheaper for buyers using stronger currencies.

Gold hit 1,180.20 dollars an ounce shortly after 1230 IST in trading on the London Bullion Market. The yellow metal is benefiting from its reputation as a hedge against inflation and anaemic economic growth in the West.

The gold has rallied 11% after India bought 200 tonne of gold from the International Monetary Fund in October. Mauritius, Sri Lanka and Russia have followed suit since then.

“Gold is moving on fast pace ever since the central banks started purchasing the metal,” said Rakesh Anand of R K Jeweller, and added the market already passing through a bullish time on buying for the current marriage season.

The precious metal in Asian region traded 0.8% higher at $1,179.20 an ounce while in futures trading in New York surged to record $1,181.60 an ounce.

The market is experiencing a rising demand from investors following a weakening dollar and volatile equity markets, said a Delhi-based bullion merchant Ravi Jalan.

“The Reserve Bank of India buying has raised speculations that more countries may follow suit, which extended strong support to the bullion markets across the globe,” Jalan said.

The IMF, which set out two months ago to sell one-eighth of its gold reserves, still has more than 200 tonne to dispose of and will do so on a ‘first-come, first-serve’ basis, reports quoted market experts as saying.