Gold touches record high

Gold price on Tuesday traded at an all-time high of ~33,310 per 10 gram in early trade in Mumbai. Such high levels were last seen in August 2013, when the rupee fell against the US greenback, increasing the landed cost of gold.

The reason for the high price of the yellow metal is being attributed to the peak wedding season demand. However, the base price of standard gold failed to close above the alltime high; it closed at ~33,215 per 10 gram.

Bullion traders say the actual trades are still around ~33,600 per 10 gram. But most buyers still prefer to exchange old jewellery for new.

The Indian rupee approaching the level of ~72 a dollar has also resulted in imports getting costlier.

“At a time of higher and more volatile local gold prices, the market saw a rise in the number of consumers preferring to exchange existing gold for new pieces. This was particularly prevalent in the south and west regions, where some retailers reported an increase of up to 45 per cent in exchange activity,” said the

World Gold Council in its

December quarter gold demand trend report released last week.

The domestic market, till a week ago, reportedly saw discounts in the range of ~200 and ~250 per 10 gram.

However, discounts have started to peter out with the onset of the wedding season and a lull in imports.

Prior to that, there was an inauspicious period and demand for the safe haven asset was virtually absent. In stark contrast, the market in New Delhi was quoting a huge premium; the price on Tuesday was ~34,000 per 10 gm, said a jeweller.

Traders say that with the general elections round the corner, the selling of hoarded gold will accelerate. This will help meet the rising tide of new demand.

Sources say demand may, however, see some traction after March when farmers start getting proceeds of their rabi produce and election spending further increases cash available to consumers.