Indian equities have adopted a falling regime since opening bell following other Asian peers which is prompting investors to diversify their portfolio towards the yellow metal. This is due to renewed fears over European sovereign-debt crisis.
Weak economic data from both US and Europe have driven gold to record highs this year, as investors seek a hedge against falling equities by buying more metal.
Markets are also expecting another rate hike by RBI, which is turning equities sour on the street.
At the Multi Commodity Exchange, gold for delivery in October opened at Rs 27,120 per 10 grams, then picked up in morning trade, and was trading in the range of Rs 28,253 – Rs 28,255 per 10 grams around 10:51 am IST.
Similarly, the metal for February contract delivery opened at Rs 28,593 per 10 grams and was trading in the range of Rs 28,764 – Rs 28,794 per 10 grams.
Investors who are under the fears over the fragility of the European and US economies may seek refuge from gold in today's trade, which can drive prices further in a day.