Indian gold futures raced higher on Tuesday, as spot prices in Asia climbed above $500 an ounce. Soyaoil rose on firmer global prices but sugar dropped as crop arrivals picked up.
December gold at the Multi Commodity Exchange (MCX) rose 31 rupees to 7,448 per 10 grams. February gold was 24 rupees up at 7,458. India is the world's biggest gold consumer, buying 70-80 percent of the 800 tonnes it needs a year for use mainly in jewellery and ornaments.
Spot gold rose as high as $502.30 an ounce before easing to $500.40/501, it's highest since December 14, 1987, when it hit $502.97. It was last quoted at $498.20/499 in New York on Monday.
Dealers said funds had diversified into precious metals on worries about inflation and geopolitical tensions. December soyaoil at the MCX was up 0.15 rupees at 348 per 10 kg.
The December contract at the National Commodities and Derivatives Exchange (NCDEX) rose 0.10 rupees, or 0.03 percent, to 348.65. Soyabean futures at the Chicago Board of Trade rebounded on Monday to close near the highs, as late buying by commission houses triggered a wave of short covering.
"The demand for soyabean products like meal is low because of the bird flu," said one broker. "The prices will not rise much." Wheat futures fell on adequate stocks. "Wheat stocks with the private trade and the government are at very comfortable levels and the next crop is due by April," one New Delhi-based trader said.
Government agencies had 8.1 million tonnes of wheat and 11.6 million tonnes of rice on November 18.