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The movement of gold on the domestic market next week is going to depend purely on the movement of the rupee, as no important data releases on the international market are expected, which would impact the prices of the yellow metal.
Bullion traders expect prices to remain steady in the coming week as well, and have pegged the movement to remain between Rs 26,000 and Rs 27,500 per 10g.
“There is no reason for prices to move up in the coming week, as there is no important data releases, which will have an impact on the yellow metal’s price movement,” said Prithviraj Kothari, a Mumbai-based bullion trader.
In the medium term, gold prices are expected to trade in the range of Rs 25,000 to Rs 29,000 per 10g, traders said.
Demand in the domestic market as well is expected to remain slack for gold in the next two months, as there is no festive season. Also, demand will also depend on the upcoming monsoon season, which will start from next month, which will also influence gold demand.
“Last week, due to a sudden dip in prices, gold demand also came in at lower levels. Now, also due to some relaxation in gold import norms, the availability of gold will increase. In the medium term, gold price will remain below Rs 30,000 per 10 g, but, the movement is purely dependent on the rupee,” said Rajiv Popley, director of Popley & Sons. Many traders who had resorted to hoarding gold due to supply concerns on the domestic market will now stop, as import norms have to relaxed to a certain extent, jewellers said.
The Reserve Bank of India relaxed gold import norms on May 21. On that day gold premiums stood at $80 per ounce, which have now crashed to $35 per ounce. Bullion analysts also say in the coming week there will be some buying, which will be witnessed in the futures market as well as short covering will be seen.
“The August contract of MCX will trade between Rs 26,500 and Rs 26,700 per 10 g during the week. Rupee will play a major role in the coming week as well. On the international market, the price of gold has not seen a sharp decline the way it has seen on the domestic market.” said Sugandha Sachdeva, AVP, metals and currencies at Religare Commodities.
Gold prices on the Mumbai spot market was at Rs 27,150 per 10 grams, it fell by 5.4 per cent, while on MCX, price of gold has fallen 2 per cent to Rs 26,823 per 10 grams since 21 May on the back of liberalisation of gold import norms.
On the international market the yellow metal fell by 3.2 per cent to $ 1249.73 per ounce since 21 May.
