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India gold hits record high; nears 22,000 rupees

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India gold recovered from its previous session's losses on Thursday to hit another record high nearing 22,000 rupees following firm overseas markets, triggering purchases from physical traders to stock for festivals.

At 5:45 p.m, the most-active gold for June delivery on the Multi Commodity Exchange (MCX) was 0.52 percent higher at 21,886 rupees per 10 grams, after hitting a record high of 21,917 rupees.

In tandem, silver on the MCX also hit a record high of 67,828 rupees per kg, and subsequently fell to 67,497 rupees, up 2.82 percent on the day.

"We are surprised at the number of deals (in gold) from morning. Traders' sentiment is (that) gold will follow silver now and go to an upper level," said a dealer with a state-run bullion dealing bank.

"Since silver is up 3 percent, but gold has just gained not even 1 percent, and it will play a catch-up," said the dealer.

Overseas gold prices hit record highs for a fifth session on Thursday and silver rallied to its strongest since 1980 as the dollar slid to a three-year low against a basket of major currencies and oil prices rallied.

Traders also eyed the rupee's movement, which plays an important role in determining the landed cost of the dollar-quoted yellow metal.

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Posted by Prashant Gandhi on 23 April, 2011 2:47:18 PM IST #