Gold surges to all-time high of Rs 16,220 per 10 gram

Gold on Wednesday surged by Rs 250 to touch a new peak of Rs 16,220 per 10 gram in the bullion market here on frantic buying by stockists ahead of the festival season amid the global rates climbing to an 18-month high of $1,018.15 an ounce.

Marketmen said buying activity gathered momentum as stockists indulged in buying gold after the metal in London climbed to an 18-month high on concern that a global economic recovery may stoke inflation amid a weak dollar, boosting demand for the metal as an alternative investment.

They said trading sentiment turned better overseas mainly on US Fed chairman Ben S Bernanke's statement that the worst US recession since the 1930s has probably ended.

Gold in overseas markets advanced $10.60, or 1.1 per cent, to $1,018.15 an ounce.

Silver coins also touched an all-time high of Rs 31,800 per 100 pieces.

Marketmen said the precious metal might see new peaks in the coming days once the festival and marriage season starts on September 19.

"We see the metal scaling more peaks as retail customers would enter the market for coming festivals season," said a bullion merchant, Ravi Jalan.

Standard gold and ornaments spurted by Rs 250 each to Rs 16,220 and Rs 16,070 per 10 gram, respectively. Sovereign also rose by Rs 50 to Rs 12,950 per piece of eight gram.

Jalan said the current upsurge was purely of stockists buying as retailers refrained from buying gold during 'Sharaadh', the ongoing inauspicious fortnight in Hindu mythology.

According to analysts, gold may climb a high level of $1,100 an ounce in the overseas market in the next six months.

Silver ready shot up by Rs 700 to Rs 26,600 per kg and weekly-based delivery by Rs 910 to Rs 27,570 per kg.

Silver coins rose to an all-time high by gaining Rs 200 to Rs 31,700 for buying and Rs 31,800 for selling of 100 pieces.