Gold prices expected to slump to Rs 9000

The ongoing correction in bullion prices is expected to continue "� this month "� till standard gold goes down to the Rs 9,000 per 10 gm mark from the current Rs 9,110 per 10 gm level at Mumbai's Jhaveri Bazar.

Analysts said the declining Indian currency, coupled with profit-booking by international traders, would continue to pull down commodity prices.

In the global markets, the yellow metal, which is currently quoting at $626.6 an ounce, is expected to decline further to a new low of $600 an ounce.

Industry experts remain optimistic on the future outlook of gold. An analyst at Citigroup said he expected the metal to climb above the $700 an ounce level in 2007. Merrill Lunch, on its part, has maintained its long-term gold price forecast at the $675 level for the next year. Bhargav Vaidya of B N Vaidya & Associates said he believed the precious metal would see inflows of fresh funds only in January, as traders would sell excess stocks this month to show a healthy account for the calendar year.

Sharing Vaidya's view, Prithviraj Kothari, director, Riddhi Siddhi Bullion, and member, Bombay Bullion Association, said gold prices would range between $610 and $625 an ounce in London this month. But they would rise next month for sure, as the sentiment in the metal is bullish, he added.

Meanwhile, gold prices have continued to see fall for the past week. Standard gold slipped 2.5 per cent to Rs 9,110 today from Rs 9,355 on Monday.

Witnessing a similar extent of decline, pure gold touched a low of Rs 9,160 from Rs 9,405 on Monday. In tandem, silver declined by Rs 220 during the week to Rs 20,515, from Rs 20,295 a kg on Monday.

In futures, gold for near-month contracts fell by Rs 59 to close the week at Rs 9,231 from Rs 9,290 at the beginning of the week on the Multi Commodity Exchange.

Experts believe gold futures closed lower on Friday, with the February contract ending near its weakest level in three weeks, as the US dollar climbed to its one-week high against the euro and yen, dulling investment demand for the precious metal.

On Friday, the dollar rallied sharply after US Treasury Secretary Henry Paulson had described Friday's non-farm payrolls report as "very, very good news" for the economy.