Some relief! Gold, silver extend gains on global cues, jewellers buying

Gold rose for the second day by adding Rs 90 to trade at Rs 25,490 per ten grams at the bullion market on Monday in tandem with a firming global trend amid increased buying by jewellers.

In addition, a depreciating rupee against the American currency supported the upside in gold prices.

Silver followed suit and advanced by Rs 150 to Rs 34,200 per kg on increased offtake by industrial units and coin makers.

Sentiments turned slightly better after gold in global market jumped as investors felt the recent losses had been too rapid amid dollar weakening, raising demand for the precious metal as an asset, traders said.

Besides, pickup in buying activity by jewellers to meet wedding season demand and depreciating rupee against the dollar that made imports costlier, supported the uptrend, they said.

At the forex market, rupee was trading 12 paise lower at Rs 64.16 (intra-day) against the dollar.

Gold in Singapore, which normally sets price trend on the domestic front, advanced 0.5 per cent to $1,104.66 an ounce and silver was 0.2 per cent higher at $14.70 an ounce.

Meanwhile, gold had retreated to the lowest level since February 2010 last week as the dollar advanced on prospects for tighter US monetary policy.

In the national capital, gold of 99.9 and 99.5 per cent purity rose further by Rs 90 each to Rs 25,490 and Rs 25,340 per ten grams, respectively.

It had rebounded by Rs 350 in Saturtay's trade.

Sovereign followed suit and gained Rs 100 to Rs 22,400 per piece of eight grams.

Tracking gold, silver ready moved up by Rs 150 to Rs 34,200 per kg and weekly-based delivery by Rs 185 to Rs 33,885 per kg.

Silver coins also spurted by Rs 1,000 to Rs 50,000 for buying and Rs 51,000 for selling of 100 pieces.

Image: After several curbs, Indian market has fallen prey to a cartel-like situation, where only a few are importing. Photograph: Ajay Verma/Reuters