Gold surges to Rs 17,500 per 10 gm

Continuing its record setting spree, gold on Friday surged by Rs 100 and touched a new high of Rs 17,500 per 10 gram in the bullion market in New Delhi on heavy buying by jewellery makers amid firming global trend.

Silver coins also rose to an all-time high of Rs 34,200 for buying and Rs 34,300 for selling of 100 pieces, recording a significant rise of Rs 200.

Analysts said that gold prices might touch Rs 18,000-level once physical buying starts in the overseas market ahead of the Christmas season.

Gold, which moves in tandem with the international trend, got support from firming global cues rather than physical buying for the current marriage season, said Mahesh Verma of OM Sons jewellers.

The yellow metal in the overseas markets rose to 1,154 dollar an ounce. Some of the investor funds were seen shifting from volatile equities to bullion, boosting gold prices.

The precious metal commenced its upward journey ever since the Reserve Bank of India bought 200 tons of gold from the International Monetary Fund, raising fears that some more central banks may follow suit.

The major transaction took place at a time when the market was passing through a hectic time of marriage season buying. Besides, a firming global trend due to dollar's weakness overseas boosted demand for the metal as an alternate investment.