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A
saleswoman holds a pair of gold bangles
while attending to customers at
a
jewellery showroom in Mumbai
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"The gold remains bearish and the prices are
likely to decline to Rs 23,000-23,500 per 10 grams in a week to month time.
This is mainly because the market is nervous of the outcome before July 29,
when the US Federal Reserve will take a decision on rate hike. Whatever the
decision, it will be negative for gold," Commtrendz research director
Gnanasekar Thiagarajan told PTI here.
The MCX gold was at Rs 24,752 per 10 grams on
Saturday, and $1,097.50 an ounce in the international market.
Mr Thiagarajan said that with a hike in rates by the
US central bank looking imminent, the question now is by how much and when,
which is keeping the market volatile till a final decision is taken.
In international markets, the prices are likely to
weaken to $1,020 an ounce in a week or month. He added that the price may also
crack below the $1,000 level.
Domestic prices of gold, however, will be cushioned
if the rupee weakens against the American currency.
At present, there is demand from stockists, who are
gearing up for the coming festivals, even as retail demand has declined, he
said.
Echoing similar views, Angel Broking associate
director-commodities and currencies Naveen Mathur said gold prices are likely
to be in a range between Rs 23,500 and 24,000 by the end of December.
Similarly, the prices in the international market
will be around 1,050 an ounce by the end of the year.
"This is mainly due to weak fundamentals like
stronger US dollar, decline in investment demand, lack of physical demand. All
this is in anticipation of Federal Reserve hiking the rates," he added.
He further said that as an asset class, gold has
lost its status as a safe haven.
During the week to July 24, gold witnessed a steep
fall in the prices to $1,085 from $1,140 in the international market, India
Bullion and Jewellers Association (IBJA) president Mohit Khamboj said.
In the domestic market, the prices have fallen from
a high of Rs 34,000 per 10 grams to a low of Rs 24,700 - losing more than 27
per cent, in a span of nine months.
The prices, he said, may go down further to Rs
23,500 with China offloading the yellow metal from its reserves to withstand
the current economic crisis.
"Demand in the domestic market had declined by
10-15 per cent and in the coming festive season, beginning with Raksha Bandhan
in August, it may go down by 40 per cent," he added.
However, P N Gadgil Jewellers chairman and managing
director Saurabh Gadgil said there is lot of demand for raw gold and some
people are pre-ordering their orders for wedding jewellery.
"Even if the footfalls are not high, still
there is a demand for raw gold and wedding jewellery as people are pre-ordering
their orders due to decline in prices. Also jewellers are stocking up now for
the India International Jewellery Show in August and the festival season. I
feel the decline in gold price is favourable for jewellers at the moment,"
he said.
The prices will definitely go up in a couple of months and the
industry is expecting a good Diwali this year.
