Gold prices in the local market may cross Rs 30,000 per 10 grams in the next three months, registering a strong recovery due to slowdown in inflows by foreign institutional investors (FIIs) and poor response in the realty segment, Assocham today said.
"Slowdown in FII inflows, rising inflation, rupee depreciation and growing signs of fatigue in the realty sector to pent up demand by jewllery manufacturers and traders in wake of India's annual wedding and festive season," would help gold prices recover, the chamber said.
The gold today gained Rs 180 to Rs 28,620 per 10 grams, after losing Rs 370 in the last three days.
Besides, gold imports in India might also reach about 1,000 tonnes in 2012-13 from about 933 tonnes worth USD 59 billion in 2011-12 and its price might touch Rs 35,000 per 10 grams by the turn of this year, it said.
"Lack of clarity on tax implications resulting in likely effect on old transactions has led to massive slump in FIIs inflows which has compelled investors to move out from capital and commodity markets and invest in bullion (both cash and ETFs) to hedge against inflation and get good returns," said Assocham Secretary General D S Rawat.
"Besides, weakening rupee against the dollar due to trade imbalance, soaring current account deficit, slowing exports on account of falling growth in the US and Euro-zone will lead to upwards spiraling of gold prices," he said.
Apart from this, the wedding season is likely to swell demand for gold which will fuel sale of jewellery and drive up imports of the precious metal, said Rawat.
