Domestic gold prices closed at an all-time high level on Saturday, surpassing the previous high set on November 16, 2011, on a declining rupee and buying support from central banks across the globe. The yellow metal gained Rs 110 to close at Rs 29,155. That topped the previous high of Rs 29,140.
Analysts say the precious metal is likely to continue its rising streak at least for some more time. T Gnansekar, director of risk advisory firm Commtrendz, said, "The rise is more of a domestic phenomenon, as the rupee is falling and the rupee outlook is still weak on domestic fiscal issues, which could take gold to above Rs 30,000 in the near term and even Rs 31,000 is possible."
In April, the rupee depreciated against the US dollar by 3.26 per cent to close at Rs 52.54, while gold prices went up by four per cent. The declining rupee and an increase in the customs duty have made gold costlier.
A bullion trader said after Akshay Tritiya, demand remained sluggish, but some buying was happening due to the ongoing marriage season.
According to a Bloomberg survey, gold prices in international markets are likely to go up next week. "Gold traders are more bullish after central banks expanded their bullion reserves and hedge funds increased bets on a rally for the first time in three weeks," it said.
Fourteen of the 28 analysts surveyed by Bloomberg expressed confidence that prices would gain next week and nine were neutral, the highest proportion in two weeks. Mexico, Russia and Turkey added about 44.8 metric tonnes of gold, valued $2.4 billion, to their reserves in March, data with the International Monetary Fund show.
The US Federal Reserve's decision to keep interest rate unchanged, indication of a third round of quantitative easing measures, and renewed concerns over the financial health of the euro zone sparked by a downgrade of Spain's sovereign debt have put the spotlight on bullion in the past few days.