1. Gold prices may plunge to Rs 20,500 level: India Ratings

Gold prices may plunge to Rs 20,500 level: India Ratings

Gold prices in the country may even dip to Rs 20,500 per ten grams, a level last seen about 5 years ago, in case of a rate hike by US Federal Reserve later this year, according to India Ratings and Research (Ind-Ra).

By: | New Delhi | Updated: July 31, 2015 7:47 AM
gold rate

Maintaining the negative outlook on gold prices for the current fiscal, the rating agency said domestic rates may decline and range between Rs 20,500-Rs 24,000 per 10 grams if the US Fed hikes interest rates, as widely expected. (Reuters)

Gold prices in the country may even dip to Rs 20,500 per ten grams, a level last seen about 5 years ago, in case of a rate hike by US Federal Reserve later this year, according to India Ratings and Research (Ind-Ra).

Maintaining the negative outlook on gold prices for the current fiscal, the rating agency said domestic rates may decline and range between Rs 20,500-Rs 24,000 per 10 grams if the US Fed hikes interest rates, as widely expected.

It also added global prices of the precious metal could drop and stay in the range of $900-1,050 per ounce.

“Till such time the uncertainty around global growth is reduced, the chances of international gold prices falling below $900 ounce corresponding to pre-2009 levels are remote,” Ind-Ra said.

The prices of gold, which is considered a hedge against an economic uncertainty, may weaken with the expectation of an increase in the US real interest rates.

“US real interest rates and gold prices have also more or less remained negatively correlated, similarly gold prices and the dollar index historically have a negative correlation, but there have been occasional bouts of a positive correlation for a short term,” it added.

On demand side, the rating agency said China and India form close to half of the total world demand for gold and they have been maintaining their pace of purchases around the 2011-2012 levels.

“China and India however showed some diverging trends in 1Q15; consumer demand in India rose 15 per cent Y-o-Y while it declined 8 per cent yoy in China. Investment demand in India however is down to a six-year low,” the agency added.

Tags: Gold Prices
  1. S
    SRIPADA DASHARATH
    Aug 1, 2015 at 10:11 am
    Very good information for gold buyers.
    Reply
    1. J
      jew
      Jul 30, 2015 at 10:19 am
      First, IND RA is one of the least credible rating agency. Second, there is not financial model which can predict price of Gold, hence the number of USD 900 per troy ounce is completely out of thin air. Third, even if Fed increases rates twice(which is twice more than what I expect), real rate will continue to be NEGATIVE. Hence this opinion is worth sending to the circular file(i.e. thrash bin)
      Reply
      1. S
        Sadasivan
        Jul 30, 2015 at 12:07 pm
        Just like Crude price was manited to $ 145/bbl in 2009 for the Indo_US Nuke Deal to be signed citing high cost for other feed,for power generation,after the Announcement Gold Monetization and Deposit Scheme by the NDA,the attack on Gold both Publicity-wise and price-wise,via manition of Naked Shorts and OTC Derivatives at the sharpest.More so,as the demand for the Physical Gold and Silver is the highest ever,as evidenced by the s in the USA. Hig time the Derivatives,unregulated Opaquer and highly leveraged arae banned.
        Reply
        1. S
          Sadasivan
          Jul 30, 2015 at 12:08 pm
          Tthe demand for the Physical Gold and Silver is the highest ever,as evidenced by the s in the USA. High time the Derivatives,unregulated Opaquer and highly leveraged are banned.
          Reply
          1. S
            saiprasad Jami
            Aug 6, 2015 at 12:23 pm
            Indian poor and middle cl people waiting for this situation in the Gold prices
            Reply
            1. S
              saiprasad Jami
              Aug 6, 2015 at 12:26 pm
              don't take smuggled gold before dec,15 gold prices come down wait and see
              Reply
              1. S
                Suri John
                Jul 31, 2015 at 10:29 am
                FED’s decision on interest rate hike really seems to pull the prices down. But, looking at the figures on gold demand and investments, I think it really doesn’t matter for the real gold bugs that how much the prices turn out to be. They keep on investing and expressing their love for precious metal.
                Reply
                1. Load More Comments

                Go to Top