Mumbai: Gold Prices Likely to Fall to Rs 23,000 Within a Month: Experts

Mumbai (PTI): Gold prices are expected to come down to a low of Rs 23,000 per 10 grams on continuing worries over interest rate hikes by the Federal Reserve and a stronger US dollar, analysts say.


“The gold remains bearish and the prices are likely to decline to Rs 23,000-23,500 per 10 grams in a week to month time. This is mainly because the market is nervous of the outcome before July 29, when the US Federal Reserve will take a decision on rate hike. Whatever the decision, it will be negative for gold,” Commtrendz research director Gnanasekar Thiagarajan told PTI here.

The MCX gold was at Rs 24,752 per 10 grams on Saturday, and $1,097.50 an ounce in the international market.

Mr Thiagarajan said that with a hike in rates by the US central bank looking imminent, the question now is by how much and when, which is keeping the market volatile till a final decision is taken.

In international markets, the prices are likely to weaken to $1,020 an ounce in a week or month. He added that the price may also crack below the $1,000 level.

Domestic prices of gold, however, will be cushioned if the rupee weakens against the American currency.

At present, there is demand from stockists, who are gearing up for the coming festivals, even as retail demand has declined, he said.

Echoing similar views, Angel Broking associate director-commodities and currencies Naveen Mathur said gold prices are likely to be in a range between Rs 23,500 and 24,000 by the end of December.

Similarly, the prices in the international market will be around 1,050 an ounce by the end of the year.

“This is mainly due to weak fundamentals like stronger US dollar, decline in investment demand, lack of physical demand. All this is in anticipation of Federal Reserve hiking the rates,” he added.

He further said that as an asset class, gold has lost its status as a safe haven.

During the week to July 24, gold witnessed a steep fall in the prices to $1,085 from $1,140 in the international market, India Bullion and Jewellers Association (IBJA) president Mohit Khamboj said.

In the domestic market, the prices have fallen from a high of Rs 34,000 per 10 grams to a low of Rs 24,700 – losing more than 27 per cent, in a span of nine months.

The prices, he said, may go down further to Rs 23,500 with China offloading the yellow metal from its reserves to withstand the current economic crisis.

“Demand in the domestic market had declined by 10-15 per cent and in the coming festive season, beginning with Raksha Bandhan in August, it may go down by 40 per cent,” he added.

However, P N Gadgil Jewellers chairman and managing director Saurabh Gadgil said there is lot of demand for raw gold and some people are pre-ordering their orders for wedding jewellery.

“Even if the footfalls are not high, still there is a demand for raw gold and wedding jewellery as people are pre-ordering their orders due to decline in prices. Also jewellers are stocking up now for the India International Jewellery Show in August and the festival season. I feel the decline in gold price is favourable for jewellers at the moment,” he said.

The prices will definitely go up in a couple of months and the industry is expecting a good Diwali this year, he added.


  1. The oversupply of gold is too huge from countries like Australia. Once South Africa was the main source of gold supply, but now gold is found in many parts of the world and the gold processing is far fast and advanced. The liquidity crisis now affected in those countries like China, which has taken India in the gold purchasing parade, now the consumer demand is plunging, along with that, the consumers are selling their gold to pay the bills. If the consumers can hold on, it will be plunging far greatly in the days ahead.

    Commodity prices like oil-rubber-cotton-metals-coal- agricultural products- natural gas etc are going downwards; and the downward trend can’t be reversed due to the oversupply of goods on the one hand and the declined demand on the other hand.

    The quota for the OPEC countries is 30 million barrels of oil/day, but it was 31.4 million barrels average/day, but it has gone upward to 31.7%, thus the surplus side of oil is getting bigger, thus the oil price would be plunging. The non-OPEC countries are going to pump more, so wait for a very high surplus side and declining oil price.

    We are now faced with a new world order. Robots at the assembly line of an automobile factory is three times productive than a person in the assembly line. Robots don’t have rest-strikes-vacation-breaks, but working restless. Now the over produced cars in the leading automobile manufacturing countries of the world like Japan-S. Korea, the U.S. and the European countries are too many millions to count.

    Gold price will be going down considerably several hundred dollars from the current price. Be patient.

    • For once, our friend AS Mathew has managed to complete a post without blaming it all on Modi and BJP. Congratulations!! smiles…

  2. Mr. Pai, thank you. As you have stated about the nun’s head covering and cross bearing issue, I am very neutral in my political observations.

    All the political parties are stained with corruption and when we watch the wealth hoarded by the politicians in their short tenure of political life, we know that they didn’t make the money through any proper avenues but through looting.

    I am not very learned in any subject but interested in many subjects and spending time in reading and researching on many current events of the world. I got a degree in Economics close to half a century back, and spending more time in that field to understand more. Anything Mr. Modi does to uplift the downtrodden people of the society, I will be very delighted; if he is standing for the rich, then I question his integrity. I have always addressed him Mr. Modi or Modiji. Mr. Pai, be frank with you and the rest, he delivered Himalayan economic promises to the electorate of India,
    and it is confusing me because, it takes land-labor and capital to accomplish those promises. He was simply in a dream land thinking that the capital will pour to India by the trillions through his globetrotting sales pitch, but it will not work like that. I respect him as the PM of India but not as an incarnation deity as the BJP and the rest of the party followers are brainwashed to believe. That is all.

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