 "US debt optimism dims gold's glow, but Indian jewellers hope to shine")
With a sharp fall in gold prices on Friday in the US following easing concerns on debt ceiling, another downward trend seems to have begun. Prices in international market have fallen to a three-month low while in India those are at a two-month low. This time, however, the fall does not seem too steep as in April and June.
“The bullion outlook remain bearish as the market is trading below the psychological $1,300, below this it may test $1,238 an ounce,” said Ajay Kedia, managing director of Kedia Commodities.
Jewellers are relieved as prices are on the lower side during the festive season and demand is likely to improve. Gold consumers last entered the market in a big was during April-May when prices fell below Rs 26,000 per 10 grams.
In the US, the government is not permitted to borrow above the debt ceiling and it is likely to hit the permitted level by October 17. On Thursday, the US House of Representatives floated a short-term debt ceiling proposal. This means risk is mitigating and “gold is losing appeal as a safe heaven. Prices can move down further on any move by the US regarding solving the debt ceiling. Positive rupee can also help prices in India to move down further,” said Kunal Soni, research analyst with Emkay Commodities.
Gold in the international market fell to $1,260.60 per ounce, but tested that level very briefly and bounced back above $1,270 per ounce. It also closed at $1,272.6 per ounce.
Next week as well, investors are expected to continue to liquidate their exchange-traded fund (ETF) holding, which will also have a bearing on gold prices and cause it to fall. Analysts say $1,220 per ounce remains as crucial support level for gold internationally, while $1,270 per ounce remains a strong resistance level. Holding in gold share, the largest gold ETF has fallen below 900 tonnes to 890 tonnes the lowest since February 2009.
“In the south, we have already seen a pick-up in jewellery demand and we expect this trend to continue due to the current festive and wedding season. Also, many people who did not invest earlier in gold are looking at this as an opportunity to invest in the yellow metal,” said Joe Alapatt, managing partner, Alapatt Heritage, a Kerala-based jewellery chain.
On the Indian market, gold is expected to trade range-bound and will trade according to the movement in the rupee. However, due to the current festive and wedding season and good rainfall, this kharif season demand is expected to stay strong.
On Saturday, gold on the Mumbai spot market closed up at Rs 30,245 per 10 g, up from Friday’s close of Rs 30,145 per 10 g. “ In the coming days, demand for gold jewellery is likely to be good due to the current festive season, but supply is an issue,” said Rajiv Popley, director of Popley Group.
“The bullion outlook remain bearish as the market is trading below the psychological $1,300, below this it may test $1,238 an ounce,” said Ajay Kedia, managing director of Kedia Commodities.
Jewellers are relieved as prices are on the lower side during the festive season and demand is likely to improve. Gold consumers last entered the market in a big was during April-May when prices fell below Rs 26,000 per 10 grams.
In the US, the government is not permitted to borrow above the debt ceiling and it is likely to hit the permitted level by October 17. On Thursday, the US House of Representatives floated a short-term debt ceiling proposal. This means risk is mitigating and “gold is losing appeal as a safe heaven. Prices can move down further on any move by the US regarding solving the debt ceiling. Positive rupee can also help prices in India to move down further,” said Kunal Soni, research analyst with Emkay Commodities.
Gold in the international market fell to $1,260.60 per ounce, but tested that level very briefly and bounced back above $1,270 per ounce. It also closed at $1,272.6 per ounce.
Next week as well, investors are expected to continue to liquidate their exchange-traded fund (ETF) holding, which will also have a bearing on gold prices and cause it to fall. Analysts say $1,220 per ounce remains as crucial support level for gold internationally, while $1,270 per ounce remains a strong resistance level. Holding in gold share, the largest gold ETF has fallen below 900 tonnes to 890 tonnes the lowest since February 2009.
“In the south, we have already seen a pick-up in jewellery demand and we expect this trend to continue due to the current festive and wedding season. Also, many people who did not invest earlier in gold are looking at this as an opportunity to invest in the yellow metal,” said Joe Alapatt, managing partner, Alapatt Heritage, a Kerala-based jewellery chain.
On the Indian market, gold is expected to trade range-bound and will trade according to the movement in the rupee. However, due to the current festive and wedding season and good rainfall, this kharif season demand is expected to stay strong.
On Saturday, gold on the Mumbai spot market closed up at Rs 30,245 per 10 g, up from Friday’s close of Rs 30,145 per 10 g. “ In the coming days, demand for gold jewellery is likely to be good due to the current festive season, but supply is an issue,” said Rajiv Popley, director of Popley Group.