MUMBAI: Even as several of Indian states are celebrating New Year on April 14, there is good news for gold buyers that prices of the yellow metal are bound to come down soon in the coming days. Bullion traders are happy that imports of gold are picking up.
With India's benchmark Bombay Stock Exchange index Sensex moving up and crude oil prices showing signs of recovery, people are fast taking their money out of gold investments and putting it back in equity markets.
Gold has been gaining on account of its safe haven status and the prices of gold gained substantially when recession hit the world.
Prices of gold that touched a record peak of Rs 15,800 per 10 gm in February, have started coming down already and by the end of April, it is expected to go down to Rs 13,500 per 10 gm.
According to experts, gold import, which was nil during February and March has also resumed in April as prices are on the decline. India reported the worst fall in gold imports in February and March as there was practically no gold imported to the country thanks to the skyrocketing prices of the yellow metal. In fact, Indian bullion traders have been exporting scrap gold to destinations like Dubai to recover from the poor sales brought about by high gold prices.
Now gold demand is beginning to pick up and traders expect that in a few weeks’ time gold would be available at affordable levels for the Indian consumers — below Rs 13,500 per 10 gram.
During February 2009, gold prices internationally peaked at $1,006 per ounce. At the same time, gold prices in India were hovering in the range of Rs 15,500 to Rs 15,800 per 10 gm.
In the last couple of months, when all the investment opportunities dried up investors pulled money out of equity, crude, base metals and diverted it to gold.
As soon as equity, base metals and the crude markets showed a revival, investors pulled their money out of gold causing a fall in the gold prices.
In the international market, gold prices are expected to fall below $850 per ounce, which would translate to about Rs 13,500 per 10 gm in the Indian markets.
This fall in gold prices will be at a right time for consumers who would like to buy gold during the marriage season and the auspicious day of Akshaya Tritiya on April 28.
Gold prices below the Rs 13,500 levels are also expected to fuel imports of gold.
Source : www.commodityonline.com