Gold extends gains on positive global cues, seasonal buying

Taking positive cues from global markets and increased seasonal buying by jewellers, gold extended gains for the second straight day by rising Rs 130 to Rs 27,350 per 10 grams at the bullion market on wednesday.

Silver also recorded a rise of Rs 250 to Rs 38,000 per kg on increased offtake by industrial units and coin makers.

Marketmen said a firming trend overseas amid speculation that a rebound in energy costs will spur US inflation -- boosting demand for bullion as a safe haven as investor holdings expanded to a 6-week high -- mainly kept precious metals higher.

They said increased buying by jewellers to meet wedding season demand also boosted sentiment.

Gold in Singapore, which normally determines price trend on the domestic front, was 0.3% higher at $1,196.95 an ounce and silver gained 0.2 % to $16.58 an ounce.

In addition, a depreciating rupee against the dollar that made the imports costlier and shifting of funds from weakening equity to rising bullion too influenced the sentiment, they added.

In the national capital, gold of 99.9% and 99.5% purity rose further by Rs 130 each to Rs 27,350 and Rs 27,200 per 10 gram, respectively. It had gained Rs 220 on tuesday.

However, sovereign continued to be enquired at last level of Rs 23,700 per piece of eight grams in scattered deals.

Following gold, silver ready traded higher Rs 250 to Rs 38,000 per kg and weekly-based delivery surged Rs 1,025 to Rs 38,140 per kg.

On the other hand, silver coins ruled steady at Rs 56,000 for buying and Rs 57,000 for selling of 100 pieces.