Gold prices halted their five-session losing spree and recovered moderately at the bullion market on Thursday on renewed buying by stockists, traders as well as rise in local buying interest amidst the beginning of the marriage season, even as analysts said prices are likely to fall further.
The yellow metal rebounded by Rs. 250 to touch Rs. 26,600 per 10 gm in the national capital, while it gained Rs. 240 to close at Rs. 25,920 in the Mumbai market. Globally, prices climbed 0.8% to $1,387.23 an ounce, after hitting a 13-month low of $1,321.95 on April 16.
“Demand is driven mostly by families who are coming to shops to buy ornaments,” said Mehul Choksi, managing director, Gitanjali group.
“We expect the current decline to stabilise in the Rs. 23,000-24,000 range,” said Pankaj Pandey, research head, ICICI Direct. “Prices will witness corrections.”
Some buyers are already adopting the wait-and-watch approach.
“I have gone to jewellers, found a nice one and booked it. But I didn’t buy despite of an EMI (equated monthly installment) scheme. I am waiting for prices to further fall down," said Swati Malhotra, an advertising professional based in Mumbai.
The buying interest has also led to a shortage of the metal. “We saw 50-70% rise in demand. This has created some kind of shortage in the market,” said Mohit Kamboj, president, Bombay Bullion Association.