Gold prices, on Friday, surged by Rs.605 to hit one-month high of Rs.28,625 per ten gram in the national capital, recording the biggest single-day gain this year, after the precious metal posted its steepest rise in nine months in the global markets.

Silver also spurted by Rs. 1,800 to Rs. 44,900 per kg on increased offtake by industrial units and coin makers.

Sentiment bolstered after gold rose the most since September 2013 in global markets as the dollar weakened amidst expectations that borrowing costs in the U.S. will remain low.

Iraq crisis

The worsening crisis in Iraq also fuelled demand for bullion as an alternative investment.

Gold in global markets, which normally sets price trend on the domestic front, climbed to $1,322.12 an ounce in Singapore, the highest level since April 12. In addition, depreciating rupee against the dollar, which makes imports of gold costlier, also influenced the sentiment.

In Delhi, gold of 99.9 and 99.5 per cent purity surged by Rs. 605 each to Rs. 28,625 and Rs 28,425 per ten gram, respectively, a level last seen on May 22. Sovereign followed suit, and shot up by Rs. 300 to Rs. 24,900 per piece of 8 gram.

In a similar fashion, silver ready spurted by Rs. 1,800 to Rs. 44,900 per kg, and weekly-based delivery by Rs. 1,900 to Rs. 44,380 per kg. Silver coins zoomed by Rs. 3,000 to Rs. 80,000 for buying, and Rs. 81,000 for selling of 100 pieces.

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