Soaring crude oil prices and falling dollar pushed gold to an all-time high of close to Rs 12,500 per 10 gram and silver to a 27-year record level of Rs 23,600 per kg on the bullion market in Wednesday, enhancing its appeal as a hedge against inflation.
The rally in precious metal prices were triggered by the reports of the crude touching an unprecedented high of $102 a barrel and the greenback falling to an all-time low against euro.
Gold touched Rs 12,460 per 10 gram, up Rs 325, in the billion market here, while silver rose to Rs 23,600 per kg.
The global trend, which normally sets prices in domestic bullion markets, is closely linked with the forex market and moves in the opposite direction of the US dollar.
Gold surged in London by $14.52 to $962.67 an ounce, while in futures trading, it rose to a record $964.70, up $15.80. Silver followed suit and added 60 cents to $19.36 an ounce, highest since October 1980.
Both the precious metals created new records as the US dollar fell to an all-time low against the euro on speculation that US Federal Reserve Chairman Ben Bernanke may indicate the central bank is prepared to keep lowering interest rates.
The US currency touched 1.5047 per euro, its lowest since 1999, the year in which the single European currency was introduced. Mr Bernanke is scheduled to deliver his semi-annual testimony to the House Financial Services Committee in Washington on Wednesday.
The precious metal is up 15 per cent in the global markets this year as a US housing slump and turmoil in credit markets led the Federal Reserve to lower interest rates when commodities were rising to record levels.
