Gold prices set to cross Rs 17,000-mark in India

Posted : July 02 2009

MUMBAI: Gold’s bull run is expected to continue uninterrupted if the predictions of experts are any indication.

According to an Asian Age report, gold prices are set to cross $1,050 per ounce or about Rs 17,000 per 10 gm in the second half of the year.

The newspaper reported that the yellow metal is currently trading at about $940 per ounce in the international market and Rs 14,640 per 10 gm in India.

Talking to the paper, Ashwin Derasari, a senior manager of the Bombay Bullion Association, said: “The rising unemployment in the US from eight per cent to 10 per cent hints that recession may not end this year and investors continue to prefer gold as a better hedge compared dollar, taking the yellow metal price to new high.”

Though there would be a negligible buying activity in India due to the high cost, he said gold prices would continue to follow the international markets.

In February, gold had reached a historic peak of $1,018 per ounce or Rs 16,035 per 10 gm.

Observing that the current period is a dull phase, gold expert Madhusudan Daga, told Asian Age: “In the overseas markets, gold prices are moving up and the Indian market always follows the international market”.

“Historically gold is also linked to the prices of crude oil that has been appreciating for some time. If crude oil prices keep on rising then the gold prices are also expected to move up,” Daga said.

Apart from this in the Indian context, he said the monsoon has always been a low demand period for the gold. The minimal demand of physical gold in India has also witnessed a decline in the gold imports.

According to the experts, the imports of the gold by India in June 2009 would hardly be about 10 tonnes, 45 per cent less than the 18 tonnes in May 2009.

In the first half of 2009, India has imported about 50 tonne gold compared with 139 tonne in the first half of 2008 due to the high prices.

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Gold prices set to cross Rs 17,000-mark in India

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