Buyers wanting to tap on the probable capital appreciation in the metal should use every dip in price in gold to invest in the yellow metal targeting a price of Rs. 65000 per 10 gm in the short to medium term.
"Meanwhile, silver too rallied over growing safe haven investments, in addition to an upsurge in industrial demand too", said Haresh Acharya, director, India Bullion and Jewellers' Association (IBJA).
Globally, spot gold and silver prices rose to nine-year and seven-year peak, respectively due to surging COVID-19 cases, soft US currency and expectations of more stimulus measures by countries worldwide to revive their virus-hit economies, analysts with domestic commodity brokerages said.
However, the price rise dampened retail demand for gold in India, the world's second largest consumer of the precious metal.
Gold for immediate delivery rose as much as 1.3 percent to US$1,865.81 an ounce, the highest since September 2011, before paring some of its gains.
In global markets, spot gold was 0.6% higher at $1,882.17 per ounce, it highest level in about nine years.
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Sriram Iyer, senior research analyst at Reliance Securities, said: "MCX gold October contract has entered an uncharted territory where the price has shifted to new range zone". "Soft Dollar, stimulus packages from the European Union and the USA have underpinned the yellow metal", said Jigar Trivedi, Fundamental Research Analyst at Anand Rathi Shares and Stock Brokers.
The price of gold has been rising while the value of the U.S. dollar has taken a hit in recent months.
On the MCX, open interest in gold had hit its highest level this month. The all-time high at $1,920.00 is now within reach though, and a test seems likely assuming the global recovery remains uninterrupted across financial markets.
So far, the price of gold has gained around 28% this year, Reuters reported.
Gold witnessed sharp buying with spot worldwide prices rallying above United States dollars 1,850 per ounce on Wednesday, he added.
Lower returns on bonds have made it more attractive to hold gold and silver, and investors are stockpiling both in the hope they will hold their value as central bank stimulus unleashed during the pandemic erodes other assets. The precious metal is also commonly used as a safe haven during volatility on the stock market.