Gold hits 1-year high, Sensex falls

Riding high on global uncertainty and unprecedented buying frenzy that yellow metal is witnessing overseas, gold price hit a one-year high here on Monday.

“We are seeing non-stop buying from the investment community and little selling of note,” a trader told Reuters, adding that exchange-traded funds and other investment funds were moving into gold as a safe haven.

In Mumbai, standard gold (99.5 purity) shot-up by Rs 345 to end at Rs 27,775 per 10 grams from last Friday’s closing level of Rs 27,430 — the level not seen since February 3, 2015. Pure gold (99.9 purity) also jumped by a similar margin of Rs 345 to finish at Rs 27,925 per 10 grams as against Rs 27,580.

The key driver for the jump in gold prices today, according to experts, is the slide in equity markets across the world.

Gold price moves typically inversely to equities and dollar. On Monday, the Sensex plunged by 330 points to 24,287.42 on bearish European cues.

“Continuous fall in oil prices and slowdown in China is impacting global markets as well as India. European market has reacted negatively on disinflation concerns,” said Vinod Nair, Head-Fundamental Research of Geojit BNP Paribas.

Some markets in Asia, including China and Hong Kong, escaped the bear hug as they were closed for the Lunar New Year holiday.

The US equities markets was deep in the red on Monday, as technology stocks extended a selloff from Friday and US crude oil slipped below $30 per barrel.