Gold on fire; zooms to record high of Rs 28,150

Gold climbed to an all-time high of Rs 28,150 per 10 grams in the national capital on Friday, posting its biggest-ever single day gain of Rs 1,310 amid frantic buying triggered by robust demand in global markets.

The trading sentiment at home was bolstered by gold's ascent to a record level in overseas markets as mounting concerns over sovereign debt and slower growth spurred investors to seek the perceived safety of bullion as an investment haven.

Gold rose to an all-time high of $1,867.95 an ounce in London, with investors preferring to hedge their funds amid melting global equity markets in the wake of worse-than-expected US economic data, coupled with growing concerns over Europe's debt crisis.

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In addition, retail buying for the upcoming marriage season further boosted the market sentiment. Silver also jumped on rising demand from industries such as electroplating and other consuming units.

All-India Sarafa (Bullion) Bazar Association president Sheel Chand Jain said the Rs 1,310 per 10 grams jump in gold prices in a single day was the biggest in the metal's history, adding that a further rise is expected as investor buying picks up.

He said a steep fall in global equity markets and weakness of the Indian rupee against the US dollar left investors with no other avenue to park their funds than gold as a safe hedge.

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The trend at home was more influenced by the international price of gold, though scattered local buying for the coming marriage season was an additional factor boosting demand for the shiny metal, he said.

On the domestic front, gold of 99.9 per cent and 99.5 per cent purity spurted by Rs 1,310 each to Rs 28,150 and Rs 28,000 per ten grams, respectively. Sovereigns followed suit and surged by Rs 1,100 to Rs 22,400 per piece of eight grams.

In a similar fashion, silver ready surged by Rs 1,500 to Rs 62,800 per kg and weekly-based delivery by Rs 1,920 to Rs 62,690 per kg. Silver coins flared up by Rs 1,000 to a fresh high of Rs 69,500 for buying and Rs 70,500 for selling of 100 pieces.