India gold hits all-time high on safe-haven buying

MUMBAI - India's gold futures hit a record high on Thursday on safe-haven buying, and on support from a weaker rupee, analysts said.

A bullish momentum is expected in the near-term as investors would continue to seek refuge in the safe-haven asset amid a deepening global recession, they said.

A weak rupee was further providing support, making the imported yellow metal expensive.

"There is no looking back in gold," said Debjyoti Chatterjee, an associate vice-president at MAPE ADMISI Research, adding "it was the ETF buying overseas along with speculative interest that moved prices higher."

Holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, rose 40.37 tonnes, or 4.5 percent, to a record 935.09 tonnes on Feb. 11.

"As the session progresses, expect further buying in gold to emerge and any dips from here on might be used as fresh buying opportunities," said Pradeep Unni, a senior research analyst with Richcomm Global Services in Dubai.

Gold has entered into a bull zone after breaking the 14,000-rupee barrier, Unni said.

"With this, gold is currently in the path of next resistance of 15,200-15,500," Unni added.

"Traders will have to be very cautious about markets getting overbought and trade with very strict stop losses," MAPE ADMISI's Chatterjee added.

Gold futures on the Multi Commodity Exchange (MCX) struck a record high of 14,760 rupees per 10 grams, before easing slightly. The contract traded at 14,708 rupees per 10 grams at 3:41 p.m.. It has gained 8.1 percent so far this year.

In 2008, gold soared to its year-high of 14,320, up 35.1 percent from its 2007 close, before falling to 11,290 on Oct. 24. Gold ended the year higher by 29.2 percent at 13,690 rupees as investors sought safety in the precious metal.

"There is hardly any asset class which can relied upon amid these recessionary times," said Harish Galipelli, head of research with Karvy Comtrade in Hyderabad, adding "gold may rocket to 15,200 by tomorrow."

SILVER RISES

Silver futures on the MCX also moved higher tracking gold, analysts said.

"...22,000 (rupees per kg) is quiet possible in silver by tomorrow," said Karvy's Galipelli.

Analysts said silver's upside will be capped on subdued base metals complex.

The white metal is usually influenced by gold as investors see all precious metals as one class. But the metal also takes a cue from base metals, particularly copper, as it is partly an industrial metal used in photography and electronics.

Silver futures on MCX was 0.88 percent higher at 21,372 rupees per kg at 3:42 p.m.