Bullion traders are upbeat, but trade analysts believe the yellow metal's dream run may be ending
Bullion traders are upbeat, but trade analysts believe the yellow metal's dream run may be ending
It may be time for gold prices to come down, some industry analysts suggest.
"Since property, stocks, mutual funds, government securities and bonds are hardly offering any attractive returns, investments in gold and silver will continue to grow. But I definitely see a fall in prices latest by August," said chartered accountant Bhargava Vaidya.
India's Associated Chamber of Commerce and Industry (Assocham) has predicted that gold could zoom to Rs 17,000 a tola (10 grams) and silver to Rs 24,000 a kg.
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Won't cross 17,00
Kishore Jain, managing director of Khazana Jewellers, is confident gold will continue to lure investors, but its price won't cross the Rs 17,000 mark.
"When investors in shares and mutual funds have lost nearly 50 per cent of their values, the ones who bought gold have gained by 30 per cent over the same period," said Madhusudan Yathigiri, a trade analyst. "But no market will be on a rise for ever, and gold rates will soften by 2010."
For how long?
He believes it's only a matter of time before the gold excitement subsides. "Some options get so popular that it may be a good idea to get out of the general flowu2026 and that's the case with gold," he explained.
At one point the real estate market was booming but today it has no takers even at discount rates, Madhusudan said.
But bullion traders are thrilled with gold trends. "Our business has increased in the past few months. And I only see rates intensifying," said Kamlesh Verma, a bullion seller.
But not everyone is so sure. Investors MiD DAY spoke to are treading cautiously.
"Talk about gold rates crashing definitely worries me, but at the moment it is the only investment offering good returns," said Arul Rajandas, an investor.
GOLD GRAPH
>>October 1, 2008: Rs 13,058
>>March 10, 2009: Rs 15,260
>>Assocham prediction: Rs 12,000 by Jan 2010 ( 10 grams)
Gold rates: March 12
>>10 gm, 99.5 purity standard mint: Rs 15,145 (15,425)
>>99.9 purity pure: Rs 15,215 (15,505)u00a0
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