Gold may hit new high of Rs 17,000

Gold prices are likely to hit a new high of Rs 17,000 per 10 grams in next the 2-3 weeks due to rising demand from investors and a weak US dollar, analysts said.
 
The price of the precious metal reached a seven-month high of Rs 15,780 per 10 grams in the domestic markets on September 3. On the same day, it also touched an almost seven-month high of $999.5 an ounce (28.34 grams) in the global markets.
 
"Expectations of further weakening of the US dollar on signs of economic recovery and rising investor demand for gold will further boost prices and the precious metal may touch a historic high of Rs 17,000 per 10 gram levels in 2-3 weeks' time in the domestic market," according to brokerage firm Bonanza Commodities Vice President Tarun Satsangi.
 
However, in the short term (next 7-10 days) gold price in the domestic markets is expected to reach Rs 16,500 per 10 grams level or $1,080 an ounce in the international market, he said.
 
India has crossed the Rs 16,000-psychological level several times before, but touched an all time high of $1,032 an ounce on May 2006.
 
Other lucrative markets, like the equity and metal markets which have been giving good returns so far- now heading for a correction, is likely to force people to park their money in gold, which in turn will boost its prices further.
 
Echoing Satsangi's view, Religare Commodities Metals and Energy In-Charge Somnath Dey said expectations of domestic demand on the onset of festive season will add to the prices.
 
The yellow metal may trade around Rs 16,200 per 10 grams in the domestic and around $1,010 an ounce in the international markets in the short-term, he added.
 
Geojit BNP Paribas' Anand James said a plethora of data released during the last week accounted for the current positive trend in gold. However, this uptrend in gold prices may affect domestic jewellery business, which may hurt imports, he added.
 
Experts believe that the prevailing high prices have prevented people from purchasing the precious metal, especially after drought triggered fears of a dent in rural income. Poor rains this year have raised fears of a slump in farm output affecting rural income, as over 60 per cent of India's population still depends on agriculture for livelihood.
 
Gold was today trading at Rs 15,725 per 10 grams on the MCX counter, while in the international market it was at $994.90 an ounce.