With just a few days left for Diwali and Dhanteras, gold prices have already zoomed to new peaks and marketmen expect them to soar further well past Rs 11,000 per 10 gram level as the festivities approach closer.
Adding to the festive spirit, return on gold investments have also grown by around 34 per cent in the last one year as the precious metal became a 'preferred choice' option for a large number of investors in the country.
The gold prices rose to a new 18-month high of Rs 10,310 per 10 gram on Saturday and with expectations of buying activity improving analysts see a further rise of about Rs 600-800 by Dhanteras, considered an auspicious day for buying gold and jewellery.
"Since disposable incomes of average Indians have gone up significantly, gold has become a preferred choice of investment for a large number of investors," Assocham President Venugopal Dhoot, said.
Gold imports would grow by 250 tonnes by FY'08, he said. Speaking at an Associated Chambers of Commerce and Industry of India (Assocham) function here, Dhoot called for much-needed investments into the country to fully exploit its mineral resources while making India a vibrant trading hub for the gold and diamond businesses.
Since the economic slowdown in America is unlikely to be arrested in the immediate future, its impact will be harsh on dollar which would continue to weaken while rupee would get stronger, he added.
This could inspire gold investors, particularly in a country like India to invest more in gold for security reasons, ASSOCHAM said in an assessment on possible gold prices during Diwali and subsequently in the marriage seasons.
Gold prices are already more than Rs 1,300 higher than the last Diwali levels. On Diwali day last year, the gold price stood at Rs 8,975 per ten gram.
Besides festival demand, a sharp surge in international prices has also added to the rally in the domestic markets. The gold prices in New York touched a 28-year high of 808.5 dollars last week.
"Weakening dollar and rising crude oil and recent Federal Reserve interest rate cut also enthused the market sentiment. Gold rose 14.80 dollar to 808.50 dollar an ounce on the Comex division of the New York Mercantile Exchange, a level last seen in January 1980, while the precious metal in India witnessed levels above Rs 10,000 in May 2006," Commodity brokerage firm Karvy Comtrade analyst Harish G said.
"With the depreciating value of rupee, the spur in the prices of gold in the domestic market is not that high as compared to last year when it ruled Rs 10,730 per 10 grams in May," he said.
The domestic prices are likely to touch Rs 10,500 levels on Diwali day this year while it may hit 850 dollar an ounce in the overseas market, the Karvy official said.
Adding to the festive spirit, return on gold investments have also grown by around 34 per cent in the last one year as the precious metal became a 'preferred choice' option for a large number of investors in the country.
The gold prices rose to a new 18-month high of Rs 10,310 per 10 gram on Saturday and with expectations of buying activity improving analysts see a further rise of about Rs 600-800 by Dhanteras, considered an auspicious day for buying gold and jewellery.
"Since disposable incomes of average Indians have gone up significantly, gold has become a preferred choice of investment for a large number of investors," Assocham President Venugopal Dhoot, said.
Gold imports would grow by 250 tonnes by FY'08, he said. Speaking at an Associated Chambers of Commerce and Industry of India (Assocham) function here, Dhoot called for much-needed investments into the country to fully exploit its mineral resources while making India a vibrant trading hub for the gold and diamond businesses.
Since the economic slowdown in America is unlikely to be arrested in the immediate future, its impact will be harsh on dollar which would continue to weaken while rupee would get stronger, he added.
This could inspire gold investors, particularly in a country like India to invest more in gold for security reasons, ASSOCHAM said in an assessment on possible gold prices during Diwali and subsequently in the marriage seasons.
Gold prices are already more than Rs 1,300 higher than the last Diwali levels. On Diwali day last year, the gold price stood at Rs 8,975 per ten gram.
Besides festival demand, a sharp surge in international prices has also added to the rally in the domestic markets. The gold prices in New York touched a 28-year high of 808.5 dollars last week.
"Weakening dollar and rising crude oil and recent Federal Reserve interest rate cut also enthused the market sentiment. Gold rose 14.80 dollar to 808.50 dollar an ounce on the Comex division of the New York Mercantile Exchange, a level last seen in January 1980, while the precious metal in India witnessed levels above Rs 10,000 in May 2006," Commodity brokerage firm Karvy Comtrade analyst Harish G said.
"With the depreciating value of rupee, the spur in the prices of gold in the domestic market is not that high as compared to last year when it ruled Rs 10,730 per 10 grams in May," he said.
The domestic prices are likely to touch Rs 10,500 levels on Diwali day this year while it may hit 850 dollar an ounce in the overseas market, the Karvy official said.
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