Gold hits new record...Silver at 31-year peak

The dollar declined as much as 0.6% against the euro, touching its lowest level in more-than 14 months ahead of Thursday's ECB policy meeting.

Silver prices continued to surge ahead, touching a new record high for a third successive day due to a combination of safe haven buying and industrial demand. The white metal touched a 31-year high in the overseas market.

At the same time, gold prices rose to all-time high for the second consecutive day amid lingering geopolitical risks in the MENA region, eurozone sovereign debt problems, rising inflation, weaker dollar and spurt in oil prices.

In the domestic market, spot silver increased by Rs 900 to an all-time high of Rs 58,400 per kg. Weekly-based delivery rose by Rs 715 to Rs 57,815 a kg.

Similarly, gold of 99.9% and 99.5% purity jumped by Rs 150 to Rs 21,300 per 10 grams and Rs 21,180 per 10 grams, respectively.

In the international bullion market, spot gold rose by as much as US$3.35, or 0.2%, to an all-time high of US$1,459.07 an ounce. It was nearly flat at US$1,455.82 an ounce by 10:09 a.m. in London.

Gold for June delivery in New York rose 0.3% to US$1,456.50 an ounce after reaching a record US$1,460.20 earlier today.

The dollar declined as much as 0.6% against the euro, touching its lowest level in  more-than 14 months ahead of Thursday's ECB policy meeting. The eurozone central bank is likely to increase its main interest rate by 25 basis points to 1.25%.

The sovereign-debt crisis in Europe deepened after Moody's Investors Service cut Portugal's credit rating. Moody's downgraded Portugal's long-term government bond ratings by one level to Baa1 from A3, and said it was considering another reduction.

China raised its key lending and deposit rates yesterday for the fourth time since mid-October to rein in spiraling consumer prices.

Federal Reserve Chairman Ben S. Bernanke said on Monday that inflation must be watched closely and FOMC last month debated when to exit from the current stimulus.

Spot silver was little changed at US$39.3075 an ounce after earlier today climbing to US$39.5013, the highest level since February 1980.

Gold held in exchange-traded products rose 1.51 metric tons to 2,030.27 tons, according to media reports. Holdings reached a record 2,114.6 tons in December.

Silver ETP assets were unchanged at 15,395.52 tons.

Source:- IIFL
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