Gold prices in India, the world's second-biggest gold consumer, remained range-bound this week, tracking muted global cues. The safe-haven asset will likely pick up demand ahead of Dhanteras festival and Diwali, as per commodity analysts.
Gold prices have come off about 4% or Rs 2,000 per 10 gram, after hitting new highs last month. Gold had touched Rs 40,000 in September due to global economic recession and trade war fears.
Jewellers are hoping that retail footfalls may heat up ahead of the festival week, as buyers have been waiting for prices to drop. In order to spur demand, retailers and jewellers have been lining up promotional offers.
Commenting on gold prices ahead of Dhanteras on Friday, Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities quoted,"With Diwali less than a week away it looks likely investors shall get ample time to buy the Gold in this range of 38000 levels as the metal looks steady."
He added, "In domestic markets, Rupee has been strengthening after steep low of 72.60 last month. Now it's below 71.00 which shall keep domestic prices floating near Rs 38,000. We believe that this correction gives good opportunity to enter as overall prices look bullish after Diwali for potential upside towards Rs 39,000 in the near term."
At 1645 IST, gold prices on MCX quoted 0.08% or 32 points higher at Rs 37,922.
"Spot gold for 24 Karat in Delhi was trading up by Rs 50 with a rise in spot demand. Spot gold jewellery consumption is set to rise ahead of the auspicious day of Dhanteras," commodities analyst at HDFC Securities Tapan Patel said. The yellow metal had closed at Rs 38,760 per 10 gram yesterday.
Spot gold was flat at $1,490.23 per ounce and US gold futures dipped slightly to $1,493.40.
Internationally Gold has recently stayed range-bound with market participants awaiting developments in the US-China trade talks and Brexit deal, amid an anticipated rate-cut by US Federal Reserve in its October 29-30 meeting. Gold has been trading in a tight $1,475-$1,500 range.
By Rupa Burman Roy