Gold zoomed by Rs 425 to Rs 31,150 per ten grams in the national capital on Wednesday on frantic buying by stockists and investors on strong global cues.
Silver also surged by Rs 700 to Rs 45,000 per kg on increased offtake by jewellers and industrial units.
Sentiments turned bullish after gold recorded the biggest advance since mid-October as the dollar weakened, boosting the appeal of the precious metal as an alternative investment, traders said.
Gold in New York, which normally sets price trend on the domestic front, jumped 2.2 per cent to $ 1,261.10 an ounce, the biggest gain since October 17. Silver also climbed 3.1 per cent to $ 20.31 an ounce.
Besides, frantic stockists buying for the ongoing marriage season and investors shifting funds from weakening equity to rising bullion further supported the uptrend, they said.
On the domestic front, gold of 99.9 and 99.5 per cent purity surged by Rs 425 each to Rs 31,150 and Rs 30,950 per ten grams, respectively. Sovereign followed suit and rose by Rs 100 to Rs 25,300 per piece of eight grams.
In a similar fashion, silver ready spurted by Rs 700 to Rs 45,000 per kg and weekly-based delivery by Rs 970 to Rs 45,600 per kg. The white metal had gained Rs 830 yesterday.
Silver coins also sky-rocketted by Rs 3,000 to Rs 85,000 for buying and Rs 86,000 for selling of 100 pieces on upsurge in marriage season demand.
Gold, Silver imports dip
Gold and silver imports declined 80.55 per cent to $ 1.05 billion in November after a slew of measures taken by the government to curb inbound shipments of the metal, aimed at narrowing the current account deficit.
Imports of gold and silver in November 2012 stood at $ 5.4 billion.
Total merchandise imports last month also declined, helping to narrow the trade deficit to $ 9.21 billion, the second—lowest level in this financial year. It was at $ 6.76 billion in September.
“Overall trade deficit from April—November 2013 has come down by almost about $ 30 billion,” Commerce Secretary S R Rao told reporters here.
The trade deficit stood at $ 99.9 billion during the first eight months of this financial year compared with $ 129.2 billion in the same period last year.
The current account deficit (CAD) touched a historic high of 4.8 per cent of GDP in 2012-13 and was mainly attributed to high imports of gold and petroleum products.
A high level of CAD puts pressure on the rupee, which has depreciated by about 15 per cent since April 30.
During April-November 2013, gold and silver imports declined 23.78 per cent to $ 25.5 billion from $ 33.5 billion in the same period last year.
The government recently increased import duty for the third time in a year to 10 per cent from 8 per cent and banned inward shipments of gold coins and medallions.
Further, the Reserve Bank of India restricted the import of gold on a consignment basis by banks.
India is the largest importer of gold, which is mainly utilised to meet the demand of the jewellery industry. Imports stood at about 830 tonnes in 2012-13.