Before Diwali, gold may cross Rs 10,500/10gm!

The gold run is set to continue in India. According to bullion analysts, the prices of the yellow metal is likely to hit Rs 10,500 this week.

The reason is gold’s status as the most profitable investment avenue in commodities and strong fundamental support amid rising tensions in southeast Asia.

Analysts said the metal will move in the range of $785-754 in the near term in London. By December-end, gold is likely to touch Rs 12,000 per 10 grams in India and $971 in London.

According to World Gold Council, a rise of Rs 100-200 is unlikely to change the market sentiment, especially during the festive season.

Pure gold hit the psychological barrier of Rs 10,000 per 10 grams on Friday for the first time in 15 months, but profit booking pulled down the price to Rs 9965 per 10 grams towards the end of the day.

Again standard gold crossed the benchmark but looked down to settle the day at Rs 9915 per 10 grams. The two benchmark varieties of gold gained Rs 425 each within a week.

Following the international trend, gold Futures for December delivery on MCX perked up to Rs 9846 per 10 grams on October 19 as against Rs 7921 per 10 grams on October 12.

In London, gold jumped substantially to $768.25 an ounce from $748.5 in the last one week. However, the metal slipped from the highest in 27 years after crude oil declined from a record and the dollar rebounded. This reduced the metal’s appeal as a hedge against inflation.

Gold retreated in London on Friday after climbing to $776.90 an ounce, the highest since 1980, while crude oil fell from the highest ever benchmark level of $90.07 a barrel. The dollar rose after touching a record $1.4319 against the Euro. Rupee closed slightly lower at 39.72 against dollar after hitting the record intra-day low at 39.81. The currency opened at 39.70.

Gold Futures for December delivery fell 30 cents to $768.40 an ounce on the exchange division of the New York Mercantile Exchange.

Gold had climbed to the highest for a most-active contract since January 22, 1980, the day after the price reached a record $873.

Source - Commodity Online