GOLD bounced back in the domestic markets on Wednesday on the back of reports that the yellow metal would soon regain the psychologically important $1,000 an ounce in overseas market and volatility in stock markets.
On Wednesday, the price of yellow metal surged by an impressive Rs 315 to close at Rs 14,735 per 10 gm in Delhi. While in Kolkata the metal shot up by Rs 265 before closing the business at Rs 14,715 per 10 gm, it traded Rs 151 higher at Rs 14,421 per 10 gm in Mumbai.
However, demand for gold jewellery dropped sharply on Wednesday on rising prices, a reversal from the healthy offtake seen in the past week. "Some consumers returned to market in the past week as prices were affordable to them," said a bullion merchant in south Mumbai. "But stayed away from purchase as prices have jumped," he added. Dealers said any price correction could revive demand again due to festivals and weddings later in the month.
Meanwhile, global metal consultancy GFMS in a report said that gold prices are expected to rise by over 25% to touch $1,100 an ounce after summer as sustained concern over global economy will prompt investors to shift to the safehaven status of the precious metal.
Commodity experts, however, said gold prices may decline to Rs 13,000-level in the domestic markets by June if rupee remains resilient against the greenback. Dollar denominated gold gets cheaper when the local currency gains against the dollar. The domestic currency has been ruling in the range of 50-mark against the dollar. A weak rupee makes the dollar-quoted gold expensive
"Gold prices have started falling from the record highs in February. The bearish trend is expected to continue, pulling prices further down to Rs 13,000 per 10 gm by June-end," brokerage firm Karvy Comtrade Harish G said on Wednesday.
It was echoed by Bombay Bullion Association president Suresh Hundia. According to him, "prices may decline to Rs 13,500 per 10 gm by April-end. If rupee remains stronger against the dollar, then gold rates may fall up to Rs 13,000 per 10 gm by June."
However, bullion dealers said gold gained support as some investors shifted their funds from volatile stock markets to bullion as safe haven. The stock markets moved up and down in the range of nearly 3% on Wednesday.
In domestic futures, the benchmark June gold contract extended gains for second day and was last traded 0.8% higher at Rs 14,408 per 10 gm at 2:25 pm locally, after touching as high as Rs 14,465. In international markets, gold moved higher again on Wednesday after reversing initial gains as appetite for risk fluctuated, reflecting volatility on world equity markets. In London, spot gold was quoted at $886.45/887.45 an ounce by 21:50 pm locally from Tuesday's New York close of $880.05. US gold futures for April delivery on the Comex division of the New York Mercantile Exchange rose $5.10 to $887.30 an ounce.
On Wednesday, the price of yellow metal surged by an impressive Rs 315 to close at Rs 14,735 per 10 gm in Delhi. While in Kolkata the metal shot up by Rs 265 before closing the business at Rs 14,715 per 10 gm, it traded Rs 151 higher at Rs 14,421 per 10 gm in Mumbai.
However, demand for gold jewellery dropped sharply on Wednesday on rising prices, a reversal from the healthy offtake seen in the past week. "Some consumers returned to market in the past week as prices were affordable to them," said a bullion merchant in south Mumbai. "But stayed away from purchase as prices have jumped," he added. Dealers said any price correction could revive demand again due to festivals and weddings later in the month.
Meanwhile, global metal consultancy GFMS in a report said that gold prices are expected to rise by over 25% to touch $1,100 an ounce after summer as sustained concern over global economy will prompt investors to shift to the safehaven status of the precious metal.
Commodity experts, however, said gold prices may decline to Rs 13,000-level in the domestic markets by June if rupee remains resilient against the greenback. Dollar denominated gold gets cheaper when the local currency gains against the dollar. The domestic currency has been ruling in the range of 50-mark against the dollar. A weak rupee makes the dollar-quoted gold expensive
"Gold prices have started falling from the record highs in February. The bearish trend is expected to continue, pulling prices further down to Rs 13,000 per 10 gm by June-end," brokerage firm Karvy Comtrade Harish G said on Wednesday.
It was echoed by Bombay Bullion Association president Suresh Hundia. According to him, "prices may decline to Rs 13,500 per 10 gm by April-end. If rupee remains stronger against the dollar, then gold rates may fall up to Rs 13,000 per 10 gm by June."
However, bullion dealers said gold gained support as some investors shifted their funds from volatile stock markets to bullion as safe haven. The stock markets moved up and down in the range of nearly 3% on Wednesday.
In domestic futures, the benchmark June gold contract extended gains for second day and was last traded 0.8% higher at Rs 14,408 per 10 gm at 2:25 pm locally, after touching as high as Rs 14,465. In international markets, gold moved higher again on Wednesday after reversing initial gains as appetite for risk fluctuated, reflecting volatility on world equity markets. In London, spot gold was quoted at $886.45/887.45 an ounce by 21:50 pm locally from Tuesday's New York close of $880.05. US gold futures for April delivery on the Comex division of the New York Mercantile Exchange rose $5.10 to $887.30 an ounce.
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