Overseas gold prices are hovering above US$ 1,740-level after world's major central banks united to support struggling European nations.
The US Federal Reserve, the European Central Bank and the central banks of Japan, Switzerland, Canada and Britain joined hands to prevent the euro zone debt crisis to spread more.
The central banks have decided to provide cheaper US dollar loans to European banks so as to stem debt crisis. Further, they have decided to lower the cost of existing dollar swap lines by 50 bps from December 5. They would also arrange bilateral swaps to provide liquidity for other currencies.
International spot gold touched US$ 1,750 – a mark over the news, resulting a strong recovery in domestic and global equities.
Both equities and commodities welcomed the news, making speculators enthusiastic to invest more.
Back to India, the December gold futures have crossed Rs 29,000 – level, and were seen trading at Rs 29,023 – Rs 29,033 per 10 grams after touching a high of Rs 29,140 per 10 grams.
Domestic bullion prices have also soared by Rs 130 per 10 gram, the price of 24 carat gold countered at Rs 29,180 per 10 grams. While 22 carat gold price stood at Rs 27,280 per 10 grams.
The recent spike in the prices is driven by the speculators rather than physical buyers as the former have extended their exposure to the precious metal just to be in line with global peers.