NEW DELHI (Commodity Online): MMTC marketing director A R Goyal has predicted a correction in gold prices in the short term following the stunning rally in the last one year.

He said gold prices have corrected a little bit in recent days and also the quantity of the precious metal bought by people has come down because of the high prices. But gold is set to go up as demand remains robust.

Speaking to newspersons, Goyal said the main reason for rally in the bullion market for gold is that the demand for precious metal physically has been good, besides liquidity and hedging against fluctuating dollar as well as inflation other than supply constraints have contributed to the soaring prices.

Production of gold has been stagnant during the decade, observed Goyal while pointing out that gold mining in South Africa, one of the major producers of the yellow metal, is facing problems because of poor electricity supply and production in China is too inadequate to meet the demand. These factors have contributed significantly to the prices of gold, he added.