Mumbai: India's gold market saw new highs on Monday on bullish foreign markets and a weaker rupee with scrap sales intensifying as consumers cashed in their bullion holdings.
Overseas gold struck a new high at $984.60 an ounce as funds poured into the yellow metal as the dollar weakened and crude oil strengthened amid growing worries over US economic growth.
In the local market, banks — the sellers of imported gold — quoted over Rs 12,900 per 10 grams, levels not seen earlier.
"Sales will be lower for sometime till the volatility subsides," said DP Naresh of Micro International, a large wholesaler in Bangalore.
A large trader in Mumbai's Zaveri Bazaar, Jitendra Kantilal of Jugraj Kantilal & Co, said there was a rush of people selling gold scrap at his shop.
A wholesaler in Lucknow, Pankaj Agarwal of Brijwasi Traders & Bullion Pvt Ltd, said scrap sales in his market had widened the price gap between locally recycled scrap and imported gold to Rs 200 per 10 grams.
However, Agarwal said, there were some nervous buyers in the market, mainly those covering their short positions. "People are expecting prices to rise more, so they are buying," Agarwal said.
India's wedding season, which will last till May, has ensured that some sales of precious metals keep trickling in though prices are being considered exorbitant.
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