Gold prices rise as global stock markets nosedive

MUMBAI: Gold breached the $1,200 an ounce level after trading range-bound for about two months as global stock markets nosedived after oil prices plunged below $50 per barrel for the first time in five years and worries deepened that Greece might break out of the eurozone.

The precious metal traded up two-fifths of a per cent at Rs 27,142 per 10 gm on January 6, reflecting the $5 an ounce rise in the metal on overseas exchange Comex.

“After more than two months of testing the $1200 an ounce level, it looks as if the catalyst the metal was waiting for has arrived,” said Gnanasekar Thiagarajan, director of research firm Commtrendz. “The fall in oil prices and problems with Greece have spooked asset classes across the world and this has resulted in safe haven buying for gold.”

Thiagarajan added, though, that the appreciation in the dollar could offset the rise in price of gold to an extent.

But with rupee likely to stay weak against the dollar, gold is likely to get costlier for Indian households.