Bullion: Gold prices reversed its one week down-trend

Bullion: Gold prices reversed its one week down-trend following sharp investment offtake and increase in buying interest from stockists and jewellery buyers to hit the psychological Rs 31,000 level attributed mainly due to higher global cues. Despite a subdued start, the yellow metal staged a strong comeback during the week trade.

Elsewhere, silver also rebounded sharply to close above the significant Rs 48,000 mark due, its highest in more than two-years, to heavy speculative buying coupled with higher industrial demand. (The level has not been seen since February 21, 2014).

In worldwide trade, weakness in equities helped the gold to boost its safe-haven appeal. Gold futures settled on Friday with a monthly gain of nearly 3 per cent, after a report on the US economic growth came in weaker than expected, pushing the dollar lower and lifting prices for the precious metal higher to a three-week high.

Gold saw further support as many investors believe that the Federal Reserve lacks the confidence to lift rates too abruptly without further signs of strength in the US economy. At its policy meeting this week, the Federal Reserve stopped short of indicating that a further increase in the US interest rates is on the cards for later this year.

Uncertainty over the path of interest rates has held gold in check since it rallied to more than two-year highs in the wake of Britain's shock vote last month to leave the European Union. For the week, gold futures ended roughly 2.6 per cent higher. Meanwhile, for the week, silver futures saw a 3.3 per cent weekly rise and a 9.3 per cent run-up for the month.