Gold may witness bullish trend and prices are expected to cross Rs 29,000 per 10 gram by Diwali, according to the Bombay Bullion Association. "We expect gold prices to shoot up to Rs 29,000-30,000 per 10 gram by Diwali due to local demand," Bombay Bullion Association President Prithviraj Kothari told PTI here.
The metal is still considered to be the best bet for hedging as the global economic crisis continue without making any tangible headway, Kothari pointed out.
Standard gold (99.5 purity) was quoting Rs 26,215, while pure gold (99.9 purity) Rs 26,355 in Mumbai on Saturday. Brokerage firm Maya Iron Ores chairman Praveen Kumar said, gold will hover around $1,626-1,650 an ounce, with a slightly negative bias due to poor liquidity with investors, while in the domestic market, it will hover between Rs 25,970 and Rs 26,460 per 10 gram in the short-run.
Gold will remain range-bound and is waiting for cues from the European markets. Gold prices witnessed extreme volatility in September, following the deepening European debt crisis. Following this, the metal touched a high of $1,923.7 and a low of $1,535 per ounce in September. However, as the debt crisis got more confounded, there was massive selling, puling down the prices by a full 11 per cent to $1,634 an ounce by end September, compared to $1,826 an ounce at the end of August.
Another reason for the fall was the US Federal Reserve's plan to swap shorter-maturity government securities for longer-dated ones failed to enthuse 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 the 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 continued to remain a leading consumer of gold.
Gold imports, which stood at 553 tonne for 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 tonne and in Q4 around 250 tonne, 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. Total gold imports stood at 958 tonne at 2010.