Gold prices are likely to remain stable: ASSOCHAM paper
The Dollar Business Bureau
In the environment of continuous political and financial uncertainties globally along with recovery in demand in the local market, the prices of gold are expected to remain stable in the range of Rs.30,500–Rs.33500 per 10 grams in spite of the metal having had a golden run up of around 25 percent since January 2016, said an ASSOCHAM Paper.
At present, the prices of yellow metal for 24 carat purity are ruling at Rs.31,000-Rs.31,500 in major cities of India, even as the demand in festive season seems to be picking up.
“In addition, the demand in festive season will get a further boost from the wedding season that is the major contributor to consumption of gold in the country. The upward trend in the short-term of a few months is expected between Rs.1,500-Rs.2000 whereas the downward trend could be limited between Rs.1,000-Rs.2000 per 10 grams,” the paper added.
Though India is among the two largest consumers of gold, along with China, with the inflows of the yellow metal in the past even going up to 1,000 tonnes a year, this year the imports have been a little low due to several factors including a long strike by jewellers who strongly protested on imposing excise duty on jewellery in the Union Budget and continuance of a customs duty of 10 percent on imports in spite expectations of a cut. The imports of gold during January and September 2016 period aggregated around 270 tonnes compared to 658 tonnes in the same period of previous calendar year, it said.
The paper noted that the recovery in domestic consumption, financial uncertainty in China’s economy, US Federal Reserve’s tapering tantrums as also the coming Presidential elections in USA are all considered as the pushing factors for the yellow metal to remain as a safe investment haven.
Analysing the trends and keeping a watch on the global developments, D S Rawat, Secretary General ASSOCHAM, said, “Gold is finding a strong support levels in the international markets and is expected to stay above $1200 mark, as a starting point for the next possible rally. All in all, given the state of play in equity, debt and properties, gold would stand out for quite some time.”