By IRNA,
New Delhi : The Gold prices in India are expected to touch Rs 17,000 per 10 grams by August 2009, in the same way, silver prices would also climb to Rs 24,000 a kg by the same time.
Since property, stocks, mutual funds, government securities and bonds are hardly offering attractive returns to investors due to meltdown in economy, investments in gold and silver would continue to grow and restrict at Rs.17,000 per 10 gm and Rs.24,000 a KG respectively by August 2009.
However, thereby moderation will start taking place in bullion trade and investors would have many other options due to which gold and silver prices would subside to fall to realistic levels of Rs.12,000 per 10 gm and less than Rs.17,000 a KG by January 2010 onwards, reveal the assessment of The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
The assessment on `Prospects of Bullion Trade’ for next 6 months carried out under aegis of its Bullion Trade Committee headed by well known bullion specialist Mr. S K Jindal, anticipates that peak crisis in stocks, reality and other secured markets would gradually start fading away by August 2009 and until then, gold and silver will continue to lure investors for their surpluses.
For the month of March 2009, average Gold price would go over Rs.15,750 per 10 gm while Silver would tray at around Rs.23,000 a KG, feels the ASSOCHAM.
Releasing ASSOCHAM findings, its Secretary General, Mr. D S Rawat said that not only sheen in attractive investment options have temporarily clouded but contracts prices of all commodities including crude oil have drastically fallen in the last 10 months or so.
As far as stocks are concerned, investors have lost nearly 50 per cent of their investment values in securities, shares and considerable amount even in mutual funds while investors in gold gained in by nearly 30% on their investments. So has been the case for silver investors as the past trends indicate that whenever gold prices went up, silver pricing accordingly shaped up.
Past trends also reveal that as and when gold prices moderated so remained the case with silver, that is why it is said that silver follows the gold, said Rawat.
According to ASOCHAM estimates, the ongoing peak crisis would start subsiding by August-September 2009 and thereby, a shift is anticipated, encouraging investors to balance their investment plans for bullion as well as other options identified above.
In such a situation, moderation in prices of gold and silver will happen faster and their prices as projected would gradually fall to finally hover around Rs.12,000 per 10 gm for pure gold and around Rs.18000 a KG for silver.
Subsequently, in course of time, their prices will further fall to realistic levels of nearly Rs.10,000 per 10 gm and less than Rs.14000 a KG.
In nutshell, the Chamber assessment also claims that as corrections start taking place in prices of bullion and current artificially melting down in tier II & tier III cities, gold and diamond will continue to drive jewellery growth in domestic market in which its demand is expected to reach around $ 30 billion by 2015 and generate additional employment for 3 lakhs workers every year.
Current estimates for jewellery market are around $ 15 billion.
Worldwide gems and jewellery industry has been growing at a good pace and is currently estimated at $ 150 plus billion. In India, it accounts for nearly 20% of the total Indian exports and employs nearly 10 lakh people directly and indirectly, despite in this area, significant job losses have taken place in the recent past.
The Chamber has suggested that since gems and jewellery industry has its dependence on skilled labour and trained manpower, professional institutions need to be set up so that further value addition is effected on domestic gems & jewellery to competently absorb the demand factor as also enhance their exports.
Secondly, the taxation burden on this sector is multi-layered which need to be curtailed and made simplier with diamonds grading.
India consumes nearly 800 tonnes of gold which account for 20 per cent of world gold consumption of which nearly 600 tonnes go into jewellery making which shows the importance and economies of scale for jewellery sector particularly in country like India and therefore, all possible measures should be put in place so that the current demand trend for jewellery is further augmented as per forecast and projections made, concluded Rawat.