Indian equity markets are showing signs of higher volatility and hinting at consolidation from its current levels primarily on the back of overseas economic concerns, the gold prices are once again believed to scale up to make newer highs in near future.
According to analysts, India's gold demand will shoot up primarily on the back of weakening of equity markets. As the infrastructure growth is seen dampening and demand of key inputs like metals, started contracting and the safe haven demand for gold is seen rising further from its current levels.
An estimate by the gold market analyst in India stated that gold prices may touch a record level of Rs.20,000 per 10 grams in the near future.
Because of uncertainties in the Eurozone, investors are shifting their portfolios to safe havens like gold. Stock markets have been choppy in recent times as people are pulling out money and these funds are coming in gold. For the next 15 days, gold prices will be in the range of Rs 18,000-19,000 per 10 grams, SMC Global vice president Rajesh Jain was quoted by the media.
It is further believed that the sustained weakness in the Eurozone will bring in fresh fears of return on investments and once again the gold prices will head towards north, hitting up to Rs 20,000 in the near term.
Moody's rating agency had downgraded its sovereign rating for Greece to 'junk' status on Monday, dropping it by four notches from A3 to Ba1 on debt concerns. This caused a fall in US stock markets and the repercussions witnessed in the Asian markets.
Manoj Soni, Director of AB Jewels, an Ahmedabad-based gold trader and jewellery maker group had mentioned that there does not seem to be any respite from the shooting gold prices as of now. The global uncertainties will continue to bear its implications on the gold demand thereby the prices for near term. The prices are believed to hover around Rs.19500 per 10 grams in Indian market, said Soni.
In the Indian markets, gold once again crossed Rs.19025 per 10 grams in New Delhi on Monday with fresh buying seen from traders. Meanwhile, on Tuesday, the gold prices opened low on Multi-Commodity Exchange (MCX) at Rs.18549 and hit the intra-day high of Rs.18668 per 10 grams by the evening trades.
International gold prices too, remained firm at Rs.1222.40 per ounce on NYMEX on Tuesday, June 15, 2010. The prices advanced for the second straight session in Asia on speculations that demand for the precious metal as an investment haven would drive prices to record levels.
Considering the creeping recovery in the European Union and the stock markets across the globe running under the correction mode, gold is expected to remain at the higher end and will make all efforts to hit Rs.20,000 mark in the near-most period.