Gold hits record high; physical demand abates

Gold hits record high; physical demand abates

Mumbai: Gold futures extended gains to a record high on Monday following strong overseas leads, prompting physical traders to keep to the sidelines awaiting price falls ahead of the key buying festival of Akshaya Tritiya next month.

The most-active gold for June delivery on the Multi Commodity Exchange (MCX) was trading 0.09% higher at 21,590 per 10 grams at 2:50pm, after hitting a record of 21,606 earlier.

“Who’ll buy at these record levels? There could be some correction. Traders are waiting for this," said a dealer with a state-run bullion dealing bank in Mumbai.

International gold hit a record high and silver rose to a 31-year high, fuelled by concerns of rising inflation globally, while a lingering euro zone sovereign debt crisis continued to boost safe-haven demand in precious metals.

A strong rupee kept the upside in prices limited, they added. The rupee plays an important role in determining the landed cost of the yellow metal, which is quoted in dollars.

“There are some orders for Akshaya Tritiya at $1,481/1,483," said the dealer.

India, the world’s largest consumer of the yellow metal, celebrates Akshaya Tritiya on 6 May, when consumers buy gold to invoke prosperity.