Mumbai: Gold futures extended gains by more than 1.5% on Wednesday afternoon to hit a record high following strong overseas markets, with help from a weaker rupee at home, which made the dollar-quoted yellow metal expensive, dealers said.
The most-active gold for October delivery on the Multi Commodity Exchange (MCX) was trading 1.70% higher at Rs 24,211 per 10 grams, after hitting a record of Rs 24,233. The contract had struck a peak in the previous session.
Overeseas gold hit a record high as investors made a beeline for bullion to shelter from the impact on financial markets of the deteriorating outlook for the global economy and Europe’s worsening debt crisis.
The rupee eased for a second day on worries a global equity sell-off may trigger outflows from shares too. Subdued Asian currencies also weighed.
The rupee plays an important role in determining the landed cost of the yellow metal, which is quoted in dollars.
“It’s a totally dull scenario due to sudden jump of $50 in last three days,” said Pinakin Vyas, assistant vice-president with importer IndusInd Bank.
Retail gold demand is expected to gain pace in August, when the festival and wedding seasons start in the world’s biggest consumer of bullion.