09/11/2016 2:20 PM IST | Updated 09/11/2016 2:40 PM IST

Gold Prices Reach Three-Year High After Black Money Crackdown, US Election Results



NEW DELHI -- Gold prices today shot up to 3-year high of ₹31,750 per ten gram, gaining a whopping ₹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 ₹500 and ₹1,000 currency notes in a bid to curb black money.

It was gold's highest closing level of ₹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.

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 ₹45,000 per kg mark by registering a steep rise of ₹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 ₹900 each to ₹31,750 and ₹31,600 per 10 gram, a level last seen on November 19, 2013. Sovereign also shot up by ₹200 to ₹24,700 per piece of eight grams.

In a similar fashion, silver ready surged by ₹1,150 to ₹45,000 per kg and weekly-based delivery by ₹1,225 to ₹44,275 per kg. Silver coins too spurted by ₹1,000 to ₹77,000 for buying and ₹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 further supported the uptrend, indicating more demand for the precious metals in coming sessions.

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