London: Gold prices on Wednesday rallied to a record
high of 1,094.40 dollar an ounce in overseas markets on
aggressive buying by traders, who are speculating that more
countries would shore up their bullion reserves like India.
The metal which had been on a rising spree since last few
sessions gathered momentum after the Reserve Bank purchased
200 metric tons of gold from the International Monetary Fund,
raising fears that more governments might follow suit.
The precious metal also strengthened in trading in London
and New York on a weaker dollar that boosted the metal's
appeal as an alternative investment.
The gold for spot trading climbed as much as 8.70
dollar, or 0.8 per cent to 1,094.40 dollar an ounce in
London. The metal surged 2.4 per cent yesterday.
The precious metal in futures trading on the New York
Merchantile Exchange traded higher at 1,093.70 dollar.
Analysts said RBI's purchase of gold from IMF "could give
rise to further diversification into gold in coming sessions
as investors shy away from the dollar toward physically backed
assets.
They said the precious metal has risen 25 per cent this
year in London as the Dollar Index, which measures the
greenback’s performance against the euro and five other
currencies, dropped 6.4 per cent.
Bureau Report
First Published: Thursday, November 05, 2009, 00:41