Gold at 3-year high on Govt’s notes move, global cues
Gold prices on Wednesday 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 and a firming trend overseas in view of Donald Trump’s victory in US presidential election. 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. Moreover, the rupee weakening against the US dollar by 23 paise to 66.85 (intra-day) at the forex market, made dollar-quoted precious metal expensive. India imports huge quantities of gold to meet domestic demand.
Sentiment also got a boost after gold jumped nearly 5 per cent in global market 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. Investors have been diverting funds from stock markets, which were down amid US election trends since morning, to bullion.