India Spot Gold, Silver Hit Record High

MUMBAI - Gold and silver held in Mumbai, India is the largest bullion market rose to record highs Monday, tracking firm overseas markets, as investment demand remained strong.
The spot gold hit a record high of 21,225 rupees (473 dollars) per 10 grams, while silver hit a new high of 54,970 rupees a kilo, the Bombay Bullion Association said.
Last week in India spot gold hit a high of 21,065 / 10 grams, while silver hit a record 52,115 / kg.
The price of gold abroad rose to a new high Monday as the escalating violence in Libya, prompted a rally in oil markets, fueling fears of inflation and boost demand for the yellow metal as a safe haven asset. Overseas spot silver is trading at its highest level in three decades.
"We still have some room left to move forward to higher prices because nobody is sure when the final Libyan crisis," Anand said James, chief analyst with Geojit Comtrade Ltd.
Gold is often bought as a hedge against inflation and is benefiting from huge investor interest after crude futures rose to their highest level in more than two years.
Oil rose amid an escalation in fighting between opposition forces in Libya and the military loyal to Muammar Gaddafi, raising concerns that the world oil exporter, 12 more are heading towards a prolonged civil war, moreover, that the unrest may spread.
In India, the ongoing wedding season is also driving demand, analysts said. Buy and gifts of higher gold jewelry in India, mainly at parties and weddings.
also collect jewelry purchases in India and farmers' incomes have increased by a better harvest. Most farmers to invest in gold and silver jewelry, as they are not exposed to other forms of asset classes in the country.
cereal production in India is expected to increase by 7.2% to 234 million tons this year the harvest until June due to increased planting.
The high prices are unlikely to dent demand for gold and silver as people are now getting used to these prices, "said another analyst.
Gold imports from India increased by 59% in 2010 thanks to strong demand for jewelry, and the time is likely to continue this year, the World Gold Council said in February.
The South Asia nation imported 918 tonnes of the yellow metal last year, compared with 578 tonnes in 2009.

(Source: http://online.wsj.com/article/SB10001424052748703386704576186284050285842.html)