Gold prices zoom to Rs 7,850

Gold prices spurted to touch new high peak of Rs 7,850 per ten gram on the bullion market on Thursday with most of the dealers increasing their stocks on fears of further rise in overseas amid festival demand.

The market was in bullish mood with the yellow metal scaling new heights in day-to-day trading in overseas markets.

Gold rose to a 24-year high in Asia as funds bought the precious metal to diversify their portfolios.

Funds and large speculators doubled their long positions in New York gold futures in last three months, US Commodity Futures Trading Commission said. Gold for immediate delivery jumped 12 per cent in past one month. Gold for immediate delivery rose $3.73 to $518.92 an ounce, the highest since March 1981.

In Tokyo, gold for delivery in October 2006 rose to 22 yen, or 1 per cent, to 2,060 yen per gram, the highest since at least 1989.

Marketmen said the prices might go further high in coming days as speculators indulged in buying at every level on hopes of a better price ahead.

They said demand in India, Middle East and Far East, which account for almost two-thirds of the global gold demand, is rising with increase in wealth in these regions.

Standard gold and ornaments shot up by Rs 100 each at Rs 7850 and Rs 7700 per ten gram respectively.  The metal gathered Rs 230 from Monday. Sovereign also shot up by Rs 100 at Rs 6000 per piece of eight gram.

A similar firm trend was noticed in silver as ready stock shot up by Rs 100 at Rs 13,000 per kilo and weekly-based delivery by Rs 105 at Rs 13,215 per kilo.