Gold prices in India were seen heading towards the milestone of Rs 9,500 per 10 gram after global prices surged to a 27-year peak of over $722 an ounce, driven by the US central bank's decision to cut rate.
Gold prices in the global market jumped to $722.05 an ounce on Wednesday after the US Federal Reserve lowered its benchmark rate by half a percentage point to 4.75 per cent, the first cut in four years.
The analysts believe that the rate cut would put downward pressure on the US dollar, thus boosting the gold prices in the non-dollar currency markets.
The US dollar was trading weak against the rupee, euro and a number of other currencies today. Besides, the crude oil, which touched a record of 82.58 dollar a barrel on Wednesday, also supported the gold rally, experts said.
"The rate cut and rising oil prices has affected the domestic gold markets as well. The gold futures both in MCX and NCDEX are trading up today. Investors are making profit in MCX," Karvy Comtrade analyst Harish G told PTI.
The October contracts at MCX and NCDEX were hovering near Rs 9,450 level in the morning trade. The spot prices at Ahmedabad was quoted near Rs 9,446 and in Mumbai at Rs 9,472.
"Gold buyers are investing in gold as an hedge. Short-term investors can continue their buying gold till the weekend as gold prices are nearing 730 dollar level," Kotak Commodities analyst Sahil Kapoor said.
He, however, cautioned the long-term gold investors. "This is not the right time for long-term investors to pump their money into physical gold market and ETFs."
Looking at the bullish trend, gold prices are speculated to rise in the coming weeks and may even cross $730, he said.
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