The Hindu Business Line : Gold prices to firm up by 7.15%, says Assocham

With festive and marriage season in India approaching, gold prices would firm up by at least 7.15 per cent in next few weeks to reach a level of Rs 10,500 per 10 gm, according to forecast made by the Associated Chambers of Commerce and Industry of India (Assocham).

Currently, domestic gold prices hover around Rs 9,800 per 10 gm.

The trends show that in the last 30 days return on gold investments have grown by 14 per cent.

This is happening because a strong perception has been built among gold consuming countries that American economy will continue to remain under the grip of slowdown, according to the chamber.

US slowdown

It further says that since economic slowdown in America is unlikely to be arrested in the immediate future, its impact will be harsh on dollar, which will continue to weaken and rupee become further stronger and thus, inspire gold investors, particularly in India.

The chamber estimates that gold imports in the fiscal 2007-08 will be around 1,000 tonnes, nearly 700 tonnes of it will go towards jewellery making and remaining 300 tonnes will be used for investment purposes in the form of bars and coins.

The bullish phase of gold will also continue and investors will be attracted towards it because gold production worldwide is restricted to 2,500 tonnes only against its demand of more than 5,000 tonnes.

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