Gold prices are likely to cross Rs 33,000 per 10 grams in the run-up to Diwali, though demand is expected to remain muted because of high prices and limited supply.
Many consider it auspicious to buy gold on Dhanteras, which falls on November 1 this year. The yellow metal closed at Rs. 32,570 per 10 grams in Delhi and Rs 31,7000 per 10 grams in Mumbai last week. It had hit an all-time high of Rs 34,500 per 10 grams in Delhi on August 28.
“There is scarcity of gold in the market due to the steps taken by the government . We are expecting prices of gold to rise in coming days as demand for gold is outpacing supply,” said Kumar Jain, vice-president, Mumbai Jewellers Association.
The government has taken several steps to curb gold imports to rein in the current account deficit (the difference between dollar inflows and outflows). Following this, gold imports that totalled 335 tonne in the April-June quarter fell 80% to 59 tonne in the second quarter.