Gold may get costlier by 24% on Dhanteras over last year

EW DELHI: Gold is likely to be expensive by 24 per cent to over Rs 20,000 per 10 gram in the national capital on Dhanteras, a day considered auspicious for buying the precious metal, as compared to year-ago period, according to the Delhi Bullion Market.

Gold prices were ruling at Rs 16,200 per 10 gram and Rs 12,070 per 10 gram on the Dhanteras day in 2009 and 2008, respectively, the trade data showed.

Presently, gold prices are ruling firm at Rs 19,925 per 10 gram, almost close to the record level of Rs 20,120 set on October 15.

"Prices of the precious metal have been on the rise in the last couple of months and on the Dhanteras day, too, gold may further firm up to over Rs 20,000 per 10 gram," Delhi Bullion Market President Surender Jain told PTI.

The rally in gold prices is more due to global cues than the domestic demand, which is expected to be normal on November 3 -- the Dhanteras day, when jewellers register the highest gold sales in a year, he said.

"High prices may deter buyer's spirit to buy gold in big volumes, but demand would definitely be there for gold coins in smaller denomination," Chandni Chowk Jewellers Association Secretary Bishan Seth said.

However, gold rates are unlikely to decline below Rs 19,500 per 10 gram in the short-term considering uncertainty in the currency market and performance of other assets in the global market, he observed.

India, the world's largest consumer of gold, imported 34.8 tonnes of precious metal in September, up by 30 per cent from 26.8 tonnes in the previous month, according to the Bombay Bullion Association.

It said the demand in October would be higher due to the festive season.

The World Gold Council , which represents leading gold mining firms across the globe, said in its latest report that it would expect gold demand to pick up further in the fourth quarter of this year on the back of the main festive season.

Gold prices in India are rising in rupee terms due to its appreciation against the US dollar, it said.

While bullion experts said gold sales during Diwali is likely to improve in anticipation of further jump in rates. Prices of the precious metal have risen currently by more than four folds from Rs 4,500 10 ten gram on the Dhanteras day in 2000.