However, offloading by stockists trimmed initial gains and the precious metal settled at R33,900 per ten grams with an all-time-high single-day gain of R1,900 in Delhi, beating the previous high of R32,975 on November 27, 2012. Silver rose R3,700 to R58,500 per kg, tracking the rally in gold.
Gold prices on the Multi-Commodity Exchange (MCX), too, hit a record R34,622 per 10 grams, aided by a sharp depreciation of the rupee, which hit a new low of 68.80 against the dollar. The rupee weakened 0.7% on Wednesday and has depreciated 13.6% this month.
Demand for physical gold in Asia, however, has slowed this week as spot prices surged to more than three-month highs and emerging market currencies have plunged substantially. Going forward, the immediate short-term target for gold
remains $1,450-1,460 an ounce on the COMEX in case of a convincing close above its crucial hurdle of $1,425/ounce. The current momentum may drive prices to R35,000 per 10 grams
level on the MCX in the short term and eventually to R37,000/10gm in the medium term, said Sugandha Sachdeva, in-charge of metals, energy & currency research at Religare Securities.
Bullion demand got a leg-up due to the rupee depreciation, a fall in equities and the apprehensions of a US action against Syria, said Surender Jain, vice-president, All India Sarafa Bazar.
Gold rallied to $1,433.31 an ounce in early trade on Wednesday its loftiest since May 14 before easing to $1,425.15 per ounce by 4.50 pm.
Spot gold was up 0.75% at $1,425.74 an ounce, while US December futures were up 0.36% an ounce at $1,425.75 around 11.30 GMT.
Investors started shifting from gold in a major way in the first half of 2013, driving prices down to their lowest in nearly three years at $1,180.71 an ounce in June, mainly due to speculations that loose US monetary policy was coming to an end. Gold demand tumbled to a four-year low in the quarter through June as investors pulled out of bullion funds and central bank purchases more than halved, according to the World Gold Council.
However, prices have risen nearly 8% this month the shapest monthly surge since January 2012 as expectations of an early rollback of the $85-billion monthly bond-purchase programme of the US Federal Reserve subsided.