Rallying for the sixth straight session, gold and silver prices breached fresh record high levels in the national capital on Wednesday mainly driven by festive and wedding season demand, according to the All India Sarafa Association.
Gold prices jumped by Rs 500 to an all-time high of Rs 81,500 per 10 grams while silver surged Rs 1,000 to Rs 1.02 lakh per kg.
Gold prices of 99.9 per cent and 99.5 per cent purity rose by Rs 500 each to Rs 81,500 per 10 grams and Rs 81,100 per 10 grams, respectively.
Silver jumped Rs 1,000 to reach a fresh high of Rs 1.02 lakh per kg from the previous close of Rs 1.01 lakh per kg on Tuesday.
In the last six trading sessions, silver prices have zoomed by Rs 10,000 per kg. Gold increased by Rs 2,850 per 10 grams since October 16.
According to Narinder Wadhwa, MD of SKI Capital, silver prices reaching Rs 1 lakh in the physical market and on the MCX is a clear reflection of multiple converging factors such as seasonal demand in India and geopolitical risks from West Asia conflict.
In July, gold and silver prices corrected sharply by 7 per cent in the local markets after the government slashed basic customs duty on gold and other metals.
However, the bullion prices rebounded as demand from Indian consumers increased due to ongoing festivals, expectations of rate cuts in the US and flare up in geopolitical tensions.
In futures trade on the MCX, gold contracts for December delivery increased Rs 112 or 0.14 per cent to Rs 78,768 per 10 grams.
The precious metal had jumped Rs 263 or 0.33 per cent to touch an all-time peak of Rs 78,919 per 10 grams during the day.
"Gold prices saw another positive move, supported by gains in Comex, where gold moved closer to USD 2,750. This in turn helped MCX gold stay above Rs 78,750, reflecting the underlying bullish sentiment.
"The ongoing favourable interest rate cycle has been one of the main factors supporting gold's rise," Jateen Trivedi, VP Research Analyst of Commodity and Currency at LKP Securities, said.
In addition, uncertainty around the outcome of the upcoming US Presidential elections is playing a role in keeping gold prices elevated, Trivedi added.
Meanwhile, silver contracts for December delivery plunged Rs 456 or 0.46 per cent to trade at Rs 99,516 per kg.
During the day, it rose Rs 109 or 0.11 per cent to hover near an all-time high level of Rs 1,00,081 per kg on the MCX.
Globally, Comex gold futures trading 0.17 per cent higher at USD 2,764.50 per ounce.
"Gold prices continued to form successive highs, surpassing the USD 2,750-mark earlier on Wednesday.
"Further, traders continue to flock toward gold owing to the current risk-off atmosphere and the possibility of further escalation of the Middle East tensions,
which continues to drive haven flows towards the precious metal," Saumil Gandhi, Senior Analyst of Commodities at HDFC Securities, said.
However, silver was quoted 0.86 per cent lower at USD 34.74 per ounce in the Asian market hours. It hit a fresh peak of USD 35.055 per ounce during the day.
"Gold and silver demonstrated strong momentum, with gold prices reaching new highs, while silver hit a fresh 12-year high at USD 35 per ounce, Rahul Kalantri, VP of Commodities at Mehta Equities Ltd, said.
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