Even as the rupee plunged to a new record low of 66.3 to the dollar on Tuesday, sustained buying by stockists and traders saw gold prices soar to a record high.

After opening trade firmly, gold scaled a high of Rs. 33,788 on the multi-commodity exchange (MCX) before retreating. Late evening it was quoting at Rs. 33,511 per 10 gram on the MCX; up Rs. 1,635 or 4.88 per cent. On the international market, it went to a high of $1,419 per ounce.

“Commodities across the board were up and while gold moved up moderately in international markets, there was a huge spike in India with traders rushing in,” C.P. Krishnan, Wholetime Director, Geojit Comtrade, a commodity trading firm told The Hindu.

The value of the rupee has an important role in determining the landed cost of gold, which is almost wholly imported into India. Commodity watchers believe that the high price could impact demand for the yellow metal in India, the biggest buyer of gold globally. Traders are trying to secure stocks as the government has in place measures to restrict imports. The government recently increased the import duty on gold to 10 per cent from 8 per cent.

Kishore Narne, Director & Head, Commodities, Currencies, Motilal Oswal Commodity Broker, said the huge jump in gold prices are mainly due to the rupee fall and strengthening of crude prices globally, given the unrest in the Middle East.

Mr. Krishnan added, “besides, there was a month-end demand for the dollar to settle crude oil bills. While the government has said the rupee will settle at its own level, there are apprehensions that Rs. 70 to a dollar is not too far away.” Amid this uncertainly, gold’s ‘safe haven’ status seems to have been re-affirmed.

Suresh Hundia, President – Emeritus, Bombay Bullion Association, concurred with the view that the apprehensions of the rupee falling further had buttressed the case for gold. “In the coming days, if the rupee strengthens, gold can react to Rs. 30,500 levels but with any further depreciation, it will move up to Rs. 34,000 levels.”

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