MUMBAI (Commodity Online): With gold prices soaring to record levels in India at Rs 16,000 per 10 gm level, bullion analysts are busy predicting the future course for the yellow metal.

But, not a single analyst is clear about whether the metal is headed for a bigger rise or a fall in the coming months. However, most of them are of the opinion that gold will continue to remain bullish and the prices are expected to hover around Rs 16,000 this week as the US dollar is showing a weakening trend amid a better demand for the metal in the domestic market.

Gold and dollar generally trend in opposite directions. The US dollar, which is considered a safe haven, softens due to weakening economic condition. As dollar declines, many investors and central banks continue to hold gold as their safe haven to protect themselves from unforeseen global economic shocks, boosting the demand for the yellow metal.

Last week gold had taken a consolidation due to the past hectic rally and also on reports that the International Monetary Fund is considering to sell one-eighth of its total gold, worth about 13 billion dollars at current price, to provide soft loans to poor countries.

The bullish trend in gold is likely to continue till Diwali. The physical demand in the domestic market will keep gold prices firm and in the international market it would be over $1,010 an ounce due to declining dollar.

Other factors like China building up its gold reserves will also boost the prices of the precious metal.

Post your comment  (0)

Connect:

Post to Twitter

Post to Facebook