Gold futures scale fresh peak of Rs 28,347 on global cues

Continuing their spectacular rally, gold futures scaled a fresh high of Rs 28,347 per 10 grams on Monday as speculators engaged in creating huge positions, tracking a firming global trend as the economic slowdown and European debt crisis boosted demand for a safe haven.

In addition, the weaker rupee and diversion of funds from melting equity markets also supported the upward spiral in gold prices.

Experts say high gold prices not to stay for too long

At the Multi Commodity Exchange, gold for delivery in December surged Rs 1,408, or 0.22 per cent, to hit another high of Rs 28,347 per 10 grams, with a business turnover of 279 lots.

Similarly, the precious metal for delivery in October rose Rs 70, or 0.18 per cent, to Rs 28,024 per 10 grams, with a business turnover of 5,990 lots.

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Analysts attributed the persistent rise in gold futures prices to speculative positions created by participants, bolstered by a rally overseas amid fears of another US recession and contagion of the euro zone debt crisis, which raised demand for bullion as a safe haven.

The falling value of the rupee, which plays a major role in determining the landed cost of the dollar-quoted shiny metal, also influenced prices, they said.

The rupee depreciated by 28 paise on Monday to trade at Rs 46.02 in the forex market, a level last seen on November 30 last year.

Meanwhile, gold climbed by a record $25.90 to $1,879 an ounce in the Asian region on Monday.