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Gold breaches Rs. 32,000 ahead of Dhanteras

business Updated: Nov 10, 2012 02:17 IST
Sachin Dave

Planning to buy gold on Dhanteras? Be prepared to shell out more for it.

The price of gold, which dipped a bit in the past few weeks, has now crossed the Rs. 32,000 mark for 10 gm. Market players say it could jump further on strong demand from Indians.

And, you may blame the re-election of Barack Obama as US President for it.

"Domestic demand would be high due to the festival season, but prices are expected to jump. It would remain at over Rs. 32,000 till Diwali at least. This is because Obama's win could stabilise the US economy, strengthen the dollar and make gold expensive in rupee terms," said Hitesh Jain, commodity analyst, India Infoline.

In the global markets, gold hit a three-week high on Friday, buoyed by expectations that US interest rates will soften after Obama's re-election. In India, the yellow metal hit a seven-week high.

On Friday, gold prices rose by Rs. 270 to touch the Rs. 32,000 mark in the Delhi spot market on robust demand.

Experts say spot gold could touch Rs. 32,500 within the next fortnight, if current level of demand sustains.

Dhanteras falls on Sunday ahead of Diwali.

Mumbai homemaker Seema Ganguli, 35, is disappointed.

"Every year, we buy gold coins for the family and jewellery for myself on Dhanteras and this time too, we plan on that. But, in the past week, prices have increased so much that I think I will have to either cancel or cut down plans to buy jewellery."

In September, gold lost sheen with a monthly loss for the first time in two years, when spot gold dipped by 2.9%.

Prices were subdued somewhat later, but during the October-December season, marked by festivals and weddings, there is always strong demand in India.

Harish Galipelli, head, commodity, JRG Wealth Management, said, "Gold consumption is highest in the last three months of the year and we see a robust demand. But as far as returns for investors are concerned, 2012 would be the first year in more than a decade when gold returns will not hit a fresh all-time high."

Gold prices have jumped nearly 14% since January 1.

"Buyers in India tend to make major buying decisions around Dhanteras and Diwali. We are seeing a strong demand for gold and expect demand to be better than last year even in volume terms for around Dhanteras," said Kiran Dixit, head marketing, DTZ jewellers.