Gold prices bounced by Rs 1,200 to hit nearly a two-month high level of Rs 75,550 per 10 grams in the national capital on Friday, tracking a buying rush in domestic markets by jewellers amid a firm global trend.
The precious metal had closed at Rs 74,350 per 10 grams on Thursday.
Extending its gains for the fourth straight session, silver prices also rallied by Rs 2,000 to Rs 89,000 per kilogram on increased offtake by industrial units and coin makers, according to the All India Sarafa Association.
The white metal had finished at Rs 87,000 per kg in the previous close on Thursday. In the past four sessions, the metal has surged Rs 5,200 per kg.
Meanwhile, gold of 99.5 percent purity also jumped by Rs 1,200 to Rs 75,200 per 10 grams from Rs 74,000 per 10 grams in the previous close.
Traders attributed the sharp rise in gold prices to strong cues in the international markets where the rates rose to a record high as investors expect a rate cut by the US Federal Reserve next week.
Also, weddings and the ongoing festival season are driving purchases with buyers opting for gold leading to an increase in demand, traders said.
In July, gold prices have corrected sharply by Rs 5,000 to Rs 71,050 per 10 grams in the local markets after the government slashed basic customs duties on gold and silver from 15 per cent to 6 per cent.
In the Asian trading hours, Comex gold was trading 0.74 per cent high at USD 2,599.70 per ounce.
"Comex gold prices reached a new all-time high on Friday, fuelled by the weakening dollar, as investors anticipating an interest rate cut by the US Federal Reserve next week," Kaynat Chainwala, AVP-Commodity Research, Kotak Securities, said.
According to commodity market experts, lower interest rates are positive for the bullion prices because it reduces the opportunity cost of holding the non-interest-bearing asset, making it attractive to investors.
Silver also quoted higher at $30.47 per ounce in the overseas markets.
"Gold prices surged to new highs, exceeding $2,550 per ounce, while silver reached three-week highs, following significant rate cuts by the European Central Bank and a weakening dollar index," Rahul Kalantri, VP Commodities of Mehta Equities Ltd, said.
According to Deveya Gaglani, Senior Research Analyst at Axis Securities, Comex gold prices experienced a strong 1.9 percent rally, the strongest since August 16 this year.
"This week's latest inflation data has significantly increased the likelihood of a rate cut by the Fed next week. This key factor has fuelled a bullish sentiment among yellow metal traders," Gaglani said.
Except for the headline, this story has not been edited by The Telegraph Online staff and has been published from a syndicated feed.
