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Gold price touches new high, crosses Rs 26,000 per 10 grams
As the global economy is on verge of a recession, owing to US credit downgrade, more and more people are buying gold, the so called safe haven asset. Gold price hit record high of Rs 26,198 per 10 grams on Tuesday morning.

GOLD PRICE touched Rs 26,198 per 10 grams today morning, setting a new price record in domestic market. With the global economy in a turmoil and value of rupee dropping to its lowest on Tuesday, more and more people are buying gold, the so-called safe-haven asset. The value of gold, which stood at a high of Rs 26,041 in October, has increased by almost 11% this month.

Earlier in 2010, the yellow metal saw a 30% increase in price, while during the first six months of 2011 it gained 5.3% and went up by 8.5% in July.

Despite a fall in the equity market, in the wake of fear of possible global recession following last week's US credit downgrade, international spot gold saw a 2% increase, hitting a record high of $1,750. Taking into account the increasing price of the yellow metal it is estimated that by the end of this year the price will reach a beyond imagination rate.

Experts expect the price to reach Rs 27,000 by Diwali this year. They further added that though demand for gold was expected to increase, number of purchases would decrease.

According to experts, the new trend in the gold market can be credited to Standard & Poor’s decision to cut the US credit rating from AAA down to AA+ with a negative forecast for the country.

Also, there is another explanation, according to which demand for gold usually increases in the fourth quarter, thus the increase in demand for the yellow metal this month, but since the supply remains unchanged, the prices have gone up.

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