Gold down 6.38% from lifetime high on other investor options
New Delhi: Preference for alternate safe haven options like equities and other securities by investors has taken a toll on gold prices, which dropped by as much as 6.38 percent since hitting a life-time high of Rs 32,975 per 10 grams here last month.
In the Delhi bullion market, the precious metal prices touched a six-week low of Rs 30,870 on Friday, a loss of Rs Rs 2,105, from its life-time high of Rs 32,975 on November 27, tracking a weak trend in the global markets.
"An economic uptrend in the US has somewhat dried up demand for the precious metal in the global markets as a safe haven investment," Geojit Comtrade Wholetime Director C P Krishnan told PTI.
In London, prices declined to as low as USD 1,635.70 an ounce on December 20, after data showed the US economy grew by 3.1 percent during the quarter to September.
Global gold prices are likely to fall further to USD 1,500 in the next few months, which will also affect the local bullion prices, Krishnan said.
To a query on whether the demand for gold will revive due to the current weakening trend of the rupee against dollar, he said the local currency is likely to appreciate up to 50-51 level against the Greenback by mid-2013.
A stronger rupee makes gold imports cheaper and India is a net importer of the precious metal.
Meanwhile, according to a city-based bullion trader, gold prices in India will follow global trends though will mainly depend on rupee's movement against the dollar.
In futures market as well, gold prices are moving downwards. Prices hit a two-week low at the Multi Commodity Exchange on December 19, when February contract rates dropped by Rs 104, or 0.33 percent, to Rs 30,952 per 10 grams, traders said.
A sluggish domestic demand at prevailing higher levels also contributed to price fall. Some investors were seen shifting their funds from weakening bullion as equity markets have been rising, they added.