Gold on Saturday scaled eight-month high of Rs.31,860 per 10 gram in Kolkata on strong buying trends after stocks and money markets melted.
Traders said upcoming festive and marriage season may further fuel demand for the precious metal pushing the prices higher.
Gold rose by Rs.700 to Rs.31,760 in Kolkatta, followed by Delhi where it gained Rs.515 to Rs.31,525 per ten gram, the levels last seen on December 18 last year.
In Chennai, gold climbed by Rs.695 to Rs.31,505 and in Mumbai by Rs.630 to Rs.31,325 per 10 gram.
On Friday, gold had jumped the most in two years by Rs.1,310 due to meltdown in stocks and money markets.
Rupee hitting record low of 61.65 a dollar and investors shifting funds from melting equities to bullion supported the uptrend, traders said.
“Speculative buying picked up in anticipation of further rise in precious metals in the coming days once the festival and marriage season starts,” said Delhi-based bullion merchant Rakesh Anand.
The rally in precious metals sparked ever since rupee plunged to all-time low, raising fears the dollar-denominated metal would become costlier and restrict supply into the market after the Reserve Bank of India (RBI) prohibited inward shipment of gold coins.
“Melting equities and depreciating rupee have left no other option for the investor fraternity but to park their funds in bullion,” said Surender Jain, Vice-President of All India Sarafa Bazar.