Gold to quote above Rs 15,000 per 10 gram till Sept

There seems to be no respite for consumers in the near-term as gold

prices are expected to rule above Rs 15,000 per 10 gram till
September as analysts
pare bets for further weakness in the rupee.

"Gold prices were ruling higher over the past few weeks due to a weak rupee that makes the dollar-quoted yellow metal expensive. However, the weakness in the rupee is expected to continue in the near-term, keeping gold prices at above Rs 15,000 per 10 gram till September," Religare Commodities Metals and Energy Incharge Somnath Dey told PTI.

Rupee value may depreciate further to Rs 55 against the US dollar in the next two months from the current level of Rs 51.72, keeping gold not below Rs 15,000 per 10 gram, he said.

Presently, gold is quoting at Rs 15,450 per 10 gram. It made an high of Rs 15,750 per 10 gram on February 19.

Noting that rupee is behaving more like Korean currency, another analyst said revaluation of global currencies like euro and Pound sterling against the US dollar is building pressure on the Indian rupee.

Citing reasons for rupee weakness, D K Joshi, Principal Economist at domestic ratings agency Crisil, said, "Rupee value is getting depreciated these days due to a stronger dollar, which is strengthening following a rise in demand for the US currency globally. Besides, lower Indian exports and sluggish capital inflow have extended pressure on the rupee".

Meanwhile, there is a short supply of foreign currency reserves in the country, which have fell drastically due to liquidation of Indian investments by foreign investors and stronger US dollar, he said.

As per official data, foreign currency reserves have so far declined by 60.44 billion dollar since the end of March, 2008.

Joshi noted that rupee will continue to remain volatile between Rs 52 and Rs 53 in the next six months which will again pressurise gold prices.

Market experts said that though costlier gold has hit demand for physical gold in India, the world's largest consumer of jewellery, but investment demand for safe-haven asset is in rise across the world due to concern about the deepening recession.

Source: Economictimes