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Gold at 3 year high following scrapping of Rs 500 / Rs1000 notes

Mumbai - India imports huge quantities of gold to meet domestic demand.

Gold prices today shot up to 3-year high of Rs. 31,750 per ten gram, gaining a whopping Rs. 900, following the government's scrapping high-denomination notes to curb black money.
A firming trend overseas following Donald Trump's victory in US presidential election also helped lift gold prices. India imports huge quantities of gold to meet domestic demand.
In a surprise move, the government banned Rs. 500 and Rs. 1,000 currency notes in a bid to curb black money. It was gold's highest closing level of Rs. 31,820 after November 19, 2013 in the bullion market here.
"The bullion demand has got a boost as people having huge funds in cash, were seen converting their wealth into gold as a safe-haven," said Rakesh Anand, a Delhi-based jeweller, reflecting the market mood.
Sentiment also got a boost after gold jumped nearly 5 per cent in global markets to its strongest in more than five weeks as investors sought safe havens in view of Trump's victory over Democrat Hillary Clinton in the US election.
Gold in Singapore, which normally sets the price trend in the market here, soared as much as 4.8 per cent, the biggest intra-day surge since June to $1,337.38 an ounce.
Silver also reclaimed Rs. 45,000 per kg mark by registering a steep rise of Rs. 1,150, largely in tandem with global trend as money flew to safe-haven investments following melting global equities.
On the domestic front, gold of 99.9 and 99.5 per cent purity rallied by Rs. 900 each to Rs. 31,750 and Rs. 31,600 per 10 gram, a level last seen on November 19, 2013. Sovereign also shot up by Rs. 200 to Rs. 24,700 per piece of eight grams.
In a similar fashion, silver ready surged by Rs. 1,150 to Rs. 45,000 per kg and weekly-based delivery by Rs. 1,225 to Rs. 44,275 per kg. Silver coins too spurted by Rs. 1,000 to Rs. 77,000 for buying and Rs. 78,000 for selling of 100 pieces.
Bullion traders said a significant rise of 3.43 per cent gold prices on the Multi Commodity Exchange futures market further supported the uptrend, indicating more demand for the precious metals in coming sessions.