Gold prices have reached an all time high in India Monday due to a rally in the foreign market and a weak Indian currency. Gold futures broadened last week’s benefits by over 0.2 percent, reaching 28,000 rupees per 10 grams of gold.
India, the biggest consumer of gold, has seen a surge in gold prices as investors attempt to find protection from another U.S. recession and from the euro zone’s debt crisis.
Analysts attribute increasing gold prices to a meeting of international speculators tracking global trends, creating positions, and heightening the demand for an economic safe haven, according to the Press Trust of India.
The weakened rupee and loss of money from equity markets also contribute to the increased gold prices.
The Multi Commodity Exchange contract for October saw a 0.08 percent rise to 27,976 rupees in gold deliveries to the country. The contract has risen over 19 percent in August so far, Reuters reports.
International spot gold reached a record high, climbing 1.4 percent Monday for a third consecutive session, and reached $1,878 per ounce. Last week, spot gold reached its largest weekly gain in over 2 years.
Gold prices have more than doubled since the beginning of the recession in 2007. The value of gold does not depend on the economic health of a single country, and the rise in prices has made it popular with investors who seek large returns and safety from unstable markets.
In the next six months, leading U.K. metals consultancy firm GFMS says international gold would rise to $1,900 an ounce due to buyers trying to secure their investments from global fiscal problems. They added that gold reaching $2,000 is unlikely.
The rupee depreciated by 28 paise on Monday in the forex market, a low level last seen nine months ago. Indian currency determines the landed cost of gold, which is quoted in dollars.
In Asia, gold reached a record night of $25.90 per ounce on Monday.