Mumbai: The great Indian gold rush once again seems to be going on an overdrive with the onset of the festival season and it may not be long away when the much-loved precious metal would cost Rs 9,000 or even Rs 10,000 per ten-gram.
The gold prices have already moved beyond Rs 8,900 level and the evolving market trends suggest further jump in its prices during the ensuing festival season.
Indians are known to develop even more affection for gold and gold-made ornaments during the festival and marriage seasons and the onset of the auspicious Navratra period is likely to bring back the lustre to gold consumption and sales in the country after a brief lull period that saw prices plunging to three-month low levels.
Gold prices resumed their upward rally on Friday last week after hitting its lowest level since July on expectations that the festival demand was set to boost the demand through the end of this year.
The recent slump in gold prices is likely to have bolstered the appetite for gold in both consumer and investor communities alike and the analysts consider a renewed upsurge imminent in the near future.
UK-based precious metal and commodity consultancy firm said in its Gold Survey 2006 that investment demand has the potential to come back strongly after going through a relatively calm period and notwithstanding the recent weakness.
GFMS executive chairman Philip Klapwijk said, "Investor buying over the last quarter of 2006 could drive the gold price back through the $700 mark."
Gold prices in the domestic market, which is largely dependent on the global trends, could surge beyond Rs 10,000 per ten-gram level again, if the international prices move beyond $700 per ounce, said an analyst.
The international prices have also been mostly weak over the recent past, while trading between $621.05 per ounce and $573.6 per ounce this month.
However, a gain of nearly $5 was registered on Friday, taking it to close to $600 level.
In the domestic market, the prices surged ahead on Friday last week as jewellery demand started moving up in anticipation for strong sales during the Navratra period, which is considered to be an auspicious time for making new and high-worth purchases.
It gained more than Rs 200 to jump beyond Rs 8,900 per 10 gram.
The expectations are also building up for further surge in gold and jewellery demand in the wedding season, which begins with Navratra and continues through the end of the year
in various parts of the country.
Gold purchases traditionally pick up in the domestic market every year in the Navratra-Diwali period, which generally takes place in the September-November period.
The festival season also coincides with a flood of weddings, which are considered to be another high-demand occasion for gold and jewellery.
Consumers are said to have already begun on their shopping drive with huge spendings planned for costly ornaments, prompted not only by the festivals but also the recent correction in bullion prices.
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