Gold, silver prices will plunge by 2010: Assocham

February 26, 2009

Commodity Online
NEW DELHI: India’s Associated Chamber of Commerce and Industry (Assocham) has predicted that gold prices could zoom to Rs 17,000 per ten grams and silver prices will touch Rs 24,000 for one kilogram.

The leading chamber of commerce and industry also pointed that gold and silver would plunge to realistic levels of Rs 12,000 per 10 gram and less than Rs 17,000 a kg by January 2010 onwards.

In a report, Assocham said the global economic downturn investments in gold and silver will surge as there are zero returns in stocks, mutual funds and bonds these days.

The report titled 'Prospects of Bullion Trade' for the next six months, carried out by Assocham’s Bullion Trade Committee said that gold and silver will continue to lure investors for their surpluses.

Gold prices have been zooming in India in the last few months in the futures and spot bullion markets. Gold prices currently stands around Rs 15,600 per ten grams.

The Assocham report said since property, stocks, mutual funds, government securities and bonds are hardly offering attractive returns to investors due to the meltdown in the economy, investments in gold and silver would continue to grow and restrict at Rs 17,000 per 10 grams and Rs 24,000 a kg, respectively by August 2009.

The report said the average gold price will go up to Rs 15,750 per 10 gram next month, while silver would stray at around Rs 23,000 a kg, it said.

”Investors have lost nearly 50 per cent of their investment values in securities, shares and even in mutual funds, while those who went for gold gained nearly 30 per cent on their investments,” said the Assocham report.

Assocham also said that as corrections start taking place in prices of bullion, gold and diamond will continue to drive jewellery growth in the domestic market and the demand is expected to reach around 30 billion dollars by 2015 and the sector would generate additional employment for three lakhs workers every year.

Current estimates for jewellery market in India was around 15 billion dollars.

The report said globally gems and jewellery industry is currently estimated at over 150 billion dollars. In India, it accounts for nearly 20 per cent of the total exports and employs nearly 10 lakh people directly and indirectly.

Assocham recommended that since gems and jewellery industry has its dependence on skilled labour, professional institutions need to be set up for further value addition which can competently absorb the demand factor as also enhance the exports.

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