Gold prices may remain firm in the next few days on weakening dollar and surging crude oil price amid sluggish domestic demand. Gold February 2008 contracts on MCX platform have touched a record high of Rs 11,030 per 10 gram in intra-day trade on Thursday on continued buying support by investors mainly due to geopolitical tensions.
In the Mumbai market, gold spot price reached a high level of Rs 10,685 per 10 gram while silver spot prices also traded at Rs 19,555 a kg on steady local demand.
?Scrap supplies seem likely to increase and jewellery offtake can fall,? an analyst said. Gold spot prices have witnessed approximately 15% appreciation in the year of 2007.
Despite a marginal consolidation in early Asian trades on Thursday, price outlook in the medium term remained bullish. Gold price in the overseas markets touched a record high of $866 an ounce on faltering dollar and surging crude oil futures, he said.
Gold received a boost in recent months as a safe-haven investment as the US equity markets tumbled almost 2% after manufacturing data showed signs of contraction, raising the possibility of a recession in 2008.
Crude oil had marginally corrected after hitting a lifetime high of $100 a barrel in the previous day on expectations of dropping US stockpiles, falling dollar and geopolitical risks.
Currently, it is moving well above the support of $845 and is expected to remain on the higher side for the short- to medium-term. The next resistance can be seen at $875 and a breach of the same may see prices test the psychological levels of $900 and then $915 levels, according to Karvy Comtrade report.