Gold prices are likely to ease to Rs 30,500 per 10 grams in the near term due to strengthening of rupee, experts said.
"Due to rupee strengthening, there is some weakness in the gold prices in the domestic market. If the currency continues to gain, gold may soften to Rs 30,500 level in short term," Commtrendz Research Director Gnanasekar Thiagarajan told PTI here.
Rupee started gaining mainly on account of several reform measures by the government, including the hike in fuel prices and announcement of FDI in multi-brand retail and aviation that are expected to accelerate fund flows into the domestic markets, he said.
However, in the international markets, the sentiment for gold prices is bullish for short term and the precious metal may reach $1,900 an ounce level by December, he said.
"Rising inflationary scenario and many central banks, like in Turkey, South Korea and Russia, buying the precious metal will further boost the demand and help in rising of the prices. Gold may reach $1,900 level by December," Thiagarajan said.
Gold is now trading at Rs 31,200 per 10 grams in the domestic market, while in the international market, it is at $1,770 an ounce (28.34 grams).
Kotak Commodity Services analyst Madhavi Mehta said US Federal Reserve announcing quantitative easing (QE3) that involves monthly purchases of an additional $40 billion worth of mortgage-backed securities with the aim of reducing unemployment will help gold.
This is an attempt to put more liquidity in the market, which will put pressure on the dollar and, hence, help gold gain strength as the metal and the US currency usually move in opposite direction.
Similarly on the domestic front, gold is likely to ease in the near term due to gaining Rupee, she said.
Gold is likely to correct to Rs 31,000 in the domestic market, while in the global markets, it is likely to be at $1,780 level.
Angel Broking head Commodities Naveen Mathur said gold has a negative bias and in the medium to near term, it is likely to trade at Rs 30,000-31,000 level in the domestic markets mainly on account of rupee appreciation.
