Mumbai: With barely 24 hours left for the Lok Sabha results to be announced on Friday there are hopes for gold and the rupee riding on a Modi-led BJP victory. If there is a hung Parliament as the ruling Congress is banking on, the rupee could cross 70 to the dollar according to TradeNext, a UK based forex dealer.
TradeNext’s Mohsin Jameel is pessimistic on Indian elections and foresees a hung parliament with a disappointing rupee. He forecasts a never seen before — hung parliament with favourites, BJP-NDA, unable to form a majority government through their coalition partners. “The rupee could dive and cross a new low; 70 against the dollar is a real possibility,” he said and adds, “The BJP has built-up a strong opposition case, with the economy and governance at the forefront of its campaign. The Congress Party has been under the radar for the 2G scam, which involved government officials, bureaucrats and politicians illegally undercharging mobile telephony companies for licences.
Adding salt to the wounds is the current state of the economy, with the rupee plunging and economic growth being below 5 per cent; a serious dilemma for the BRIC’s nation.” He said “a hung parliament is a real possibility, which is bad for business, the economy and the rupee,” and expects “the current stable range will break through the 70 to the dollar mark, crossing new boundaries as India’s elite looks to divert investments outside India.”
On the gold front Prithviraj Kothari of Riddhi Siddhi Bullion is optimistic about a Modi-government being installed in Delhi. He said it would be not only good for the country but also for the gem and jewellery industry. Speaking to this newspaper Mr Kothari said because of gold imports and shortage of the metal, the premium in the market has shot upto Rs 2 lakhs per kg of gold. The result is that while gold costs Rs 27,500 per 10 gram abroad it costs the Indian consumer Rs 29,500 per 10 gram because of 10 per cent import duty. He said smugglers are making a profit of 16 per cent or Rs 4.50 lakh per kg of gold smuggled into India. Ketan Kothari, director of bullionindia.in hopes the results will cheer up gold industry which is caught between US recovery and geo- political tensions in certain countries.
