Gold rush begins as prices decline

Investors and jewellers are once again looking towards gold with renewed vigour, as it has strengthened its position on the back of fall in prices in the global as well as domestic markets.

Gold is witnessing a fall in its prices because of bullish trend in dollar-dominated assets and falling crude prices, which has reduced the appeal of the precious metal as a hedge against inflation, leading brokerage house Karvy said in its latest report.

"Prices are expected to trade on the lower side below $615 levels and market is likely to test levels of $580 in a very short term," the report said.

In the domestic bullion market, Standard gold (99.5 purity) met resistance yesterday and plunged to end at Rs 8,855, showing a fresh loss of Rs 10 over the previous close of Rs 8,865. While pure gold (99.9 purity) ended at Rs 8,905 over Tuesday's close of Rs 8,915.

If this analysis is to be believed, the bullion market would witness trading at a much bigger level, as retail consumers, jewellers and investors would like to take advantage of the opportunity.