Gold prices rallied to regain Rs. 27,000 per 10 gm level in the national capital on Saturday on brisk buying by retail customers after recent steep fall amid short-covering by speculators on firming global trend.
The gold, which had suffered biggest ever losses following a meltdown in global bullion prices, recovered by Rs. 500 to Rs. 27,100 per 10 gm. It had gained Rs. 250 in the previous session.
Traders said the recovery in gold prices was backed by emergence of retailers buying at attractive low levels, as the metal suffered the biggest loss of Rs. 3,250 in four sessions earlier this week.
They said the rising trend was further fuelled on speculators covering their short positions created in the bear markets and a rise in futures trade on the Multi Commodity Exchange.
The gold in New York reclaimed 1,400 dollar an ounce by climbing 1.4 per cent to 1,412.40 dollar an ounce and spurted one per cent to Rs. 26,069 per 10 gm on the MCX.
Buying activity was mostly confined to gold as silver continued to fall for the sixth straight day on Saturday by losing Rs. 100 to Rs. 45,300 per kg.
This was on reduced off-take by industrial units on expectations of more correction in the prices. Silver had plunged Rs 7,200 in previous five sessions.
Gold in world markets had slumped the most since 1983 on April 15, by losing nearly 10 per cent on speculations that Cyprus might lead other European countries in selling the metal from reserves to revive the economy.
The slump in bullion had come at a time when the Indian markets were witnessing a higher demand for the ongoing marriage season. Gold is bought during festivals and marriages, with the main festival season starting from August to October.
The demand is also generated during the year-end for the festivals like ‘Akshyatritiya’ and ‘Diwali’.In the national capital, gold of 99.9 and 99.5 per cent purity spurted by Rs. 500 each to Rs 27,100 and Rs. 26,900 per 10 gm, respectively. Sovereign held steady at Rs. 24,000 per piece of eight gram in limited deals.
On the other hand, silver ready fell by Rs. 100 to Rs. 45,300 and weekly-based delivery declined by the same margin to Rs. 43,300 per kg. However, silver coins shot up by Rs. 1,000 to Rs. 75,000 for buying and Rs. 76,000 for selling of 100 pieces.