New Delhi: Gold prices rallying to eight month high and regaining the psychological Rs 31,000 per ten grams level was the feature of trading in the bullion market during the past week.
Silver followed suit and spurted on increased demand from industrial units and coin makers amid fears of restricted supply as government hiked import duty.
Market remained closed on Thursday on account of "Independence Day".
Bullion traders said the sharp rally in gold prices was due to fears of tight supply following government's decision to hike import duty on gold and silver to narrow current account deficit.
The traders were also concerned that the rupee may hit record low of 61.65 against the American currency, that made the dollar-denominated precious metals costlier.
Firming trend in overseas markets where gold rose to its highest in almost two months and silver capped the biggest weekly rally since 2008 on signs of higher physical demand for precious metals, also supported the bullion, they added.
Gold in New York, which normally set price trend on the domestic front, the precious metal gained 4.5 percent this week, the most since July 12.
Besides, shifting of funds from melting equity and forex markets to surging bullion as a safe haven further fuelled the uptrend.
On the domestic front, gold of 99.9 and 99.5 percent purity recorded a hefty rise of Rs 2,670 to Rs 31,525 and Rs 31,325 per ten grams, a level last seen on December 18, 2012. Sovereign also climbed by Rs 500 to Rs 24,900 per piece of eight gram.
In a similar fashion, silver ready and weekly-based delivery notched a handsome gain of Rs 7835 each to Rs 50,685 and Rs 50,535 per kg this week.
Silver coins too spurted by Rs 7,000 to Rs 87,000 for buying and Rs 88,000 for selling of 100 pieces.
First Published: Saturday, August 17, 2013, 17:17