Gold back in fashion, crosses Rs 28,000

The high bout of volatility and subdued sentiment in the stock markets are expected to turn investors towards gold in the coming days.

On Thursday, gold prices staged a smart rebound to surpass the psychologically important Rs 28,000 milestone once again as frantic speculative buying activity swept the bullion hub here in the face of highly bullish overseas trend.

The yellow-metal shot-up by a whopping Rs 945 or 3.38 per cent to end at Rs 28,835 per 10 grams — the level not seen since May 20, 2014.

In worldwide trade, gold surpassed the significant $1,200 an ounce mark on safe-haven attractiveness and also persistent risk-off sentiment following the overnight dovish monetary policy tightening remarks by US Federal Reserve chair Janet Yellen.

While some of the global gold Exchange Traded Funds (ETFs) have alrea-dy started seeing fresh inflows amidst uncertainty over global economic growth and geopolitical tension in the Middle East, PR Somasundaram, managing director, India, World Gold Council believes that the yellow metal would remain very much in focus going ahead. “All the fundamental factors that influences the prices of gold are remaining strong. The safe haven feature of gold has come back. If weakness in stock market continues for some more time, investors would certainly look towards gold as part of their diversification strategy,” he added.

According to World Gold Council, demand for gold in India has once again proven resilient in the face of a range of challenges, underlining the role of gold as an essential component of household savings. India consumed 848.9 tonnes of gold in 2015, up two per cent from 828.5 tonnes in 2014.