Gold hits another peak above Rs31,000 per 10 gm

Gold prices rose to a new high above Rs31,000 per 10 gm on Friday on the back of overnight gains in the world market and a decline in rupee value.

Spot gold in Mumbai moved above Rs31,000 per 10 gm for the fist time, although the precious metal pared some gains in the afternoon, tracking overseas markets.

Gold for October delivery on the Multi Commodity Exchange (MCX) was trading 0.14 per cent higher at Rs30,847 in morning trade, after hitting a record high of Rs30,870 earlier in the day.

Activity on the spot market, however, was restricted as buyers hoped for prices to ease. Stockists and jewellers also were apprehensive of contracting the metal at a higher price. Also, there was an increased flow of scrap to the jewellery market, which limited demand for fresh metal.

With the marriage season over and with the start of the monsoon, demand for gold had already eased. Demand is expected to fall nearly 40 per cent to around 200 tonnes. 

And, with another drought looming and food prices going up again, a reduced spending power could hurt gold demand further, say analysts.