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Gold prices to touch Rs 17,000 per 10 grams by Aug: Assocham

Posted on: February 25th, 2009 and is filed under Brokerage Recommendations.

NEW DELHI: With investment opportunities in stocks and realty waning due to the global economic meltdown, gold prices are likely to touch Rs 17,000 per 10 grams by August, an industry body said today. Similarly, silver prices would also soar to Rs 24,000 a kg by the same time, as assessment study by industry body Assocham said.

“Since property, stocks, mutual funds, government securities and bonds are hardly offering attractive returns to investors due to the meltdown in the economy, investments in gold and silver would continue to grow and restrict at Rs 17,000 per 10 grams and Rs 24,000 a kg, respectively by August 2009,” it said.

However, gold and silver would subside to fall to realistic levels of Rs 12,000 per 10 gram and less than Rs 17,000 a kg by January 2010 onwards, it pointed out.

The assessment on ‘Prospects of Bullion Trade’ for the next six months, carried out by Bullion Trade Committee headed by bullion expert S K Jindal, anticipated that peak crisis in stocks, realty and other secured markets would gradually start fading away by August and until then, gold and silver will continue to lure investors for their surpluses.

In March, the average gold price would go up to Rs 15,750 per 10 gram, while silver would stray at around Rs 23,000 a kg, it said.

Investors have lost nearly 50 per cent of their investment values in securities, shares and even in mutual funds, while those who went for gold gained nearly 30 per cent on their investments, it said.

Similar pattern was seen in silver as the past trends indicate that whenever gold prices moved up, silver pricing accordingly shaped up.

Meanwhile, Assocham also claimed that as corrections start taking place in prices of bullion, gold and diamond will continue to drive jewellery growth in the domestic market and the demand is expected to reach around 30 billion dollars by 2015 and the sector would generate additional employment for three lakhs workers every year.

Current estimates for jewellery market was around 15 billion dollars.

It further said globally gems and jewellery industry is currently estimated at over 150 billion dollars. In India, it accounts for nearly 20 per cent of the total exports and employs nearly 10 lakh people directly and indirectly.

The Chamber suggested that since gems and jewellery industry has its dependence on skilled labour, professional institutions need to be set up for further value addition which can competently absorb the demand factor as also enhance the exports.

source: Economictimes

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