Gold sets new peak at Rs16,250 on Diwali buying, global cues

With only days left for Diwali, gold prices today scaled a new high of Rs16,250 per 10 gm on hectic buying by stockists to meet the enhanced festival demand from retailers and fabricators.

Marketmen said gold soared in tune with global rates, where prices touched a new peak of USD1,070.80 an ounce on weakening of dollar against its major rivals.

Besides, buying activity gathered momentum as stockists indulged in creating fresh positions to meet demand from jewellery fabricators ahead of Diwali, they said.

In London, gold set a new peak of USD1,070.80 an ounce on weakening dollar. Gold has jumped around 20% this year. Silver also touched a fresh high of USD18.08 an ounce, the highest since July 2008, as weakening dollar shifted investors' attention to fast yielding assets like bullion.

Gold and dollar generally move in opposite directions. If the dollar softens, investors prefer to purchase gold as a hedge against inflation, they said.

In the local market, silver coins, used for gifting purposes or as an offering to god during Diwali, rose further by Rs200 to Rs32,900 for buying and Rs33,000 for selling of 100 pieces.

Silver ready recovered Rs100 to Rs27,600 and weekly-based delivery by Rs180 to Rs27,630 per kg.

Standard gold and ornaments shot up by Rs130 each to set a new peak of Rs16,250 and Rs16,100 per 10 gm, while sovereign climbed a record high of Rs13,000 per piece of 8 gm.