Gold prices are likely to ease to Rs 30,500 per 10 grams in the near term due to strengthening of rupee following government’s recent measures like fuel hike,experts said.
“Due to rupee strengthening,there is some weakness in the gold prices in the domestic market. If the currency continues to gain,gold may soften to Rs 30,500 level in short term,” Commtrendz Research Director Gnanasekar Thiagarajan
Rupee started gaining mainly on account of several government measures like the hike in fuel prices and announcement of FDI in multi-brand retail and aviation,he
However,in the international markets,the sentiment for gold prices is bullish for short term and the precious metal may reach USD 1,900 an ounce level by December,he said.
“Rising inflationary scenario and many central banks,like in Turkey,South Korea and Russia,buying the yellow metal will further boost the demand and help in rising of the prices. Gold may reach USD 1,900 level by December,” Thiagarajan said.
Currently,gold is at Rs 31,200 per 10 grams in the domestic market,while in the international market,it is at USD 1,770 an ounce (28.34 grams).
Echoing a similar view,Kotak Commodity Services analyst Madhavi Mehta said US federal bank announcing quantitative easing (QE3) that involves monthly purchases of an additional USD 40 billion worth of mortgage-backed securities with the aim of reducing unemployment will help gold.
This is an attempt to put more liquidity in the market,which will put pressure on the US green back and,hence,help gold in gaining strength.
Similarly in the domestic front gold is likely to ease in the near term due to gaining Rupee,she said.
Gold is likely to correct to Rs 31,000 in the domestic market,while in the global markets,it is likely to be at USD 1,780 level.
Angel Broking head Commodities Naveen Mathur said gold has a negative bias and in the medium to near term,it is likely to trade at Rs 30,000-31,000 level in the domestic markets mainly on account of rupee appreciation.
However,in the international markets,gold is not very bullish as the liquidity after the federal bank announcement of QE3 will not affect the overall US economy,he