New Delhi: Gold prices are likely to hit a
new high of Rs 17,000 per 10 grams in next the 2-3 weeks due
to rising demand from investors and a weak US dollar, analysts
said.
The price of the precious metal reached a seven-month
high of Rs 15,780 per 10 grams in the domestic markets on
September 3. On the same day, it also touched an almost
seven-month high of USD 999.5 an ounce (28.34 grams) in
the global markets.
"Expectations of further weakening of the US dollar on
signs of economic recovery and rising investor demand for gold
will further boost prices and the precious metal may touch a
historic high of Rs 17,000 per 10 gram levels in 2-3 weeks'
time in the domestic market," according to brokerage firm
Bonanza Commodities Vice President Tarun Satsangi.
However, in the short term (next 7-10 days) gold price in
the domestic markets is expected to reach 16,500 per 10 grams
level or USD 1,080 an ounce in the international market,
he said.
India has crossed the Rs 16,000-psychological level
several times before, but touched an all time high of USD
1,032 an ounce on May 2006.
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Other lucrative markets, like the equity and metal
markets which have been giving good returns so far- now
heading for a correction, is likely to force people to park
their money in gold, which in turn will boost its prices
further.
Echoing Satsangi's view, Religare Commodities Metals and
Energy In-Charge Somnath Dey said expectations of domestic
demand on the onset of festive season will add to the prices.
The yellow metal may trade around Rs 16,200 per 10 grams
in the domestic and around USD 1,010 an ounce in the
international markets in the short-term, he added.
Geojit BNP Paribas' Anand James said a plethora of data
released during the last week accounted for the current
positive trend in gold.
However, this uptrend in gold prices may affect domestic
jewellery business, which may hurt imports, he added.
Experts believe that the prevailing high prices have
prevented people from purchasing the precious metal,
especially after drought triggered fears of a dent in rural
income.
Poor rains this year have raised fears of a slump in farm
output affecting rural income, as over 60 per cent of India's
population still depends on agriculture for livelihood.
Gold was today trading at Rs 15,725 per 10 grams on the
MCX counter, while in the international market it was at USD
994.90 an ounce.
Bureau Report
First Published: Sunday, September 06, 2009, 12:31