GOLD NEWS UPDATES 26.11.2012:- Gold prices are expected to
remain firm in the weeks ahead and stay in the Rs 33,500-35 ,000 range by the
end of the year, analysts said. The yellow metal, which remained near an all
time record high of Rs 32,850 in the capital on Saturday, is expected to surge
further, they said.
On Saturday, the precious metal gained Rs 290 in the
capital to touch Rs 32,850. In Mumbai , gold closed at Rs 32,340. Silver also
increased by Rs 770 a kg to close at Rs 63,960. In the international market, the
yellow metal increased by 1.34% to touch $1,751.4 an ounce. Analysts say while
prices in the international markets moderated compared to last year, domestic
prices have continued to increase due to the depreciating Indian currency. On
Friday, the
rupee stood at 55.52 to a
dollar. Experts say the rupee's slide has led to an over 15% increase in the
domestic price of gold in the past one year.
"What we are seeing is a
consolidation in the price of gold. There is a positive momentum after the
US Federal Reserve decided
to trigger the third quantitative easing for economic recovery. In a couple of
weeks, prices should touch Rs 33,500," said Gnanasekhar Thiagarajan, director,
Commtrendz Research, an advisory firm.
The increase in price in the last
few months has also been fuelled by the demand for the yellow metal from central
banks across the globe as they diversified their assets. In addition, the
uncertainty in the Eurozone and West Asia added to the momentum, as did rising
demand from people opting for a "safe haven" investment in the form of the
yellow metal.
"One of the main reasons for the rise in prices is the
rupee depreciation. The trend is likely to continue in the near term," said
Jayant Manglik, president (retail distribution), Religare Securities. Analysts,
however, say the firming up of prices cannot be termed as a comeback for the
yellow metal. Even as prices are expected to continue to increase in the short
term, experts say the rate of increase will be slower.
"Rate of increase
in price of gold is expected to come down to 10-12 % in the next one year as
against the 15% we saw last year. The increase is primarily rupee driven," said
Bhargava Vaidya, proprietor at Mumbaibased B N Vaidya & Associates,
referring to the price outlook in the domestic market.
Even as gold
prices internationally have declined from around $1,921 an ounce last
October-November to $1,751.4 an ounce currently, it is the depreciation in the
Indian currency that has led to a significant increase in domestic prices. With
the growth expectations of the economy still subdued, experts say that the
Indian currency may not appreciate considerably anytime soon.
After the
marriage season concludes, experts say demand for gold jewellery is likely to
witness a dip. "People are losing faith in the currency, so they are opting for
gold now. But there is also a liquidity crunch in every sector today. We expect
the demand to remain very poor," Bombay
Bullion Association president Prithviraj Kothari said. Gold
prices may even touch Rs 35,000 by year end, he added.
'Demat gold to arrest rising demand'
PUNE: RBI deputy governor Subir Gokarn on Sunday said there is a need to
"dematerialize" gold like any other financial product to reduce its physical
imports, the rise of which has been blamed for the high current account deficit
that is feared to touch a new record high this year. "It (high gold imports) is
creating some macroeconomic stresses, and so the challenge is to find ways to
replicate the financial characteristics of gold without necessarily causing
physically importing," Gokarn said on the last day of the two-day annual Bancon
here. The current account deficit or CAD has been rising on the back of record
trade deficits, which in October jumped to a 12-year high of $21 billion on the
back of rising oil and gold imports. AGENCIES
