Strengthening dollar weakens gold; price likely to fall to Rs 24,000
Prices of gold have staged a mild recovery in the domestic market after touching a multi-year low on Friday
Mumbai: While the prices of gold have staged a mild recovery in the domestic market after touching a multi-year low on Friday, bullion experts said that the yellow metal is still in a strong bearish trend and its prices could see further downside in the coming days.According to them, the gold prices could fall by another Rs1,000 to Rs1,500 per 10 gram in the dom-estic market. Though retail buying has picked up momentum during the last one week, bullion traders said a lot of retail households are still waiting for the prices to fall further.
“We expect the prices of gold to fall further by $100 per ounce in the global market and Rs1,000 per 10 grams in the domestic market,” said Sachin Kothari, director, Bullion India.
In the domestic market, gold is trading at Rs 25,954 per 10 gram while it is trading at $1,178 per ounce in the global market. “This is a very good buying opportunity. We have seen a 30 to 40 per cent increase in retail buying during the last one week,” added Mr Kothari.
The predominant reason for the fall in gold prices, according to Naveen Mathur, associate director, commodities and currencies at Angel Broking, is the strengthening of the US dollar. “The US has wound up its quantitative easing programme. And the recovery in US economic growth is further lending strength to the dollar. For the prices of gold to rise, there should be either inflationary pressure, global economy or geo-political crisis,” he said.
On the domestic side, he said the weakness in the rupee has prevented a major fall in the prices of gold. “However, the yellow metal is still in a bearish phase and its prices are likely to fall to Rs 24,000 per 10 gram in the domestic market.”C.P.Krishnan, whole time director, Geojit Commodities, feels that if the rupee appreciates to the 59-60-level mark, the gold price in India could fall to Rs 24,000 per 10 gram.
( Source : dc )
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