MUMBAI : Gold will witness further bullishness and prices are expected to cross Rs 29,000-30,000 per 10 grams by Diwali, according to the Bombay Bullion Association.
“We expect gold prices to shoot up to Rs 29,000-30,000 per 10 grams by Diwali due to local demand,” Bombay Bullion Association President Prithviraj Kothari said.
The metal is still considered the best bet for hedging, with no end in sight to the global economic turmoil, Kothari said.
Standard gold (99.5 per cent purity) was being quoted at Rs 26,215 per 10 grams, while pure gold (99.9 per cent purity) was being sold for Rs 26,355 per 10 grams in Mumbai on Saturday.
However, in contrast, brokerage firm Maya Iron Ores Chairman Praveen Kumar said in the domestic market, gold prices will hover between Rs 25,970 and Rs 26,460 per 10 grams in the short-run.
They would move in a range between USD 1,626 and USD 1,650 an ounce in international markets, with a slightly negative bias due to poor liquidity with investors, he predicted.
He said gold will remain range-bound and is waiting for cues from European markets. Gold prices witnessed extreme volatility in September amid the deepening European debt crisis. The metal witnessed a high of USD 1,923.7 per ounce and a low of USD 1,535 per ounce in September.
However, as the debt crisis got even more exacerbated, there was massive selling, pulling down prices of the precious metal by a full 11 per cent to USD 1,634 an ounce by end-September, compared to USD 1,826 an ounce at the end of August.
Another reason for the fall was the failure of the US Federal Reserve’s plans to swap shorter-maturity government securities for longer-dated ones in enthusing markets, leading to a massive sell-off in all asset classes, including equities and commodities, Indiainfoline commodity analyst Hitesh Jain said.
“On the price front, however, we remain bullish on gold in light of the current downward spiral. We deem that this correction will effectively propel domestic jewellery fabrication demand by the onset of festive and wedding season,” he added.
“Moreover, the US Fed decision to continue to keep the long-term interests at near zero levels, also corroborates the long-term bullish price projections for the yellow metal,” Jain said.
Meanwhile, India remains a leading consumer of gold worldwide despite the upward spiral in prices. Gold imports, which amounted to 553 tonnes in the January-June period, could cross the 1,000 tonne-mark this year amid strong demand, the World Gold Council said.
“The first half performance was very strong and if this trend continues and Q3 imports reach 170-180 tonnes and in Q4, around 250 tonnes, then we may cross the 1,000-tonne-mark this year,” WGC Managing Director for India and the Middle East Ajay Mitra had recently said.
India’s total gold imports stood at 958 tonnes in 2010.