New Delhi: Gold is unlikely to glitter for the investors in 2014-15. The domestic gold price for FY15 is likely to decline to Rs 25,500 per 10 gram to Rs 27,500 per 10 gram, said India Ratings and Research in a report.
Gold fell by Rs 350 to Rs 30,400 per ten gram on Thursday in the national capital on stockists selling, tracking a weak trend in global markets.
India Ratings and Research (Ind-Ra) has assigned a negative outlook to domestic gold prices for FY15. The rating agency said that the physical premium of gold which touched a new high in 2013 due to a series of restrictions imposed by government and Central bank on the yellow metal to control current account deficit; will also come down. Physical premium of gold was estimated at Rs 2,800 per 10 gram in December 2013.
“The agency expects the premium to substantially decline by half from the peak levels given the uncertainty on exact impact of import restriction has reduced,” said Ind-Ra.
It said that the expected decline in domestic gold prices takes cues from the likelihood of a decline in international gold prices to between $1,150 per ounce (oz) - $1,250 per oz during FY15, from the current levels of $1,300 per oz.
“The gradual winding-up of unconventional monetary policy (UMP) in the US might cause interest rates to creep up and discourage inve-stments in gold. Cont-inued risk-on-trade on back of a global economic recovery could generate limited interest in gold ETF investments and could lead to further unwinding of gold inve-ntory. However, the pace is likely to be moderate,” said the report.
