In the Indian context, as per traders in the bullion market, yellow metal is likely to see significant price rise by as much as 3.5% till Diwali in the wake of weakening rupee and increase in international price for the metal. Due to global equity market rout, gold in the international market last Thursday recorded biggest single day gain of about 2.5%, its highest jump since June 2016.
In Friday's session, however spot gold was dragged lower but held close to over two month high reached in the previous trading day. Spot gold traded lower by 0.2% at $1,221.06 an ounce.
Further, current market scenario that highlights huge volatility in equity markets, battered bond market situation and IL&FS crisis, it is likely that gold buying will gain momentum this festive season on safe-haven appeal in comparison to other asset class. Also, an increase in gold price in the international market seconds the safe haven appeal of the precious yellow metal.
At this point in time, when stock markets are witnessing sharp correction plus there are other concerns in the wake of NBFCs fall-out, no asset class in the market currently promises a good yield. Nonetheless, at this junction, gold can provide some returns to its investors and market experts anticipate its price to jump by 3.15% to Rs 32,700 per 10 gm in comparison to its Friday's trading price of Rs. 31,700.
Other analysts also view the yellow metal to definitely increase in price to Rs 32,400-32,500 per 10 gm by Diwali festivities.
Meanwhile, in trade today, precious gold in 22K gold is priced at Rs. 31,060 per 10 gm while 24K gold is available for Rs. 33,060.