Mumbai: Gold is expected to hold steady to firm in 2013 and could reach the Rs 34,000 level as economic growth prospects improve and certain international factors push up the commodity's price, market experts have said.
In the long term, gold looks firm with most central banks pushing liquidity into the markets and increasing their loading of the yellow metal, Kotak Commodity Services analyst Madhavi Mehta said.
“The central banks of Brazil and Russia are reportedly planning to increase their gold holding next year. We expect gold to rule at Rs 28,000-33,000 level in the domestic market in 2013. However, stabilizing rupee, which may come to 50 level, and fiscal cliff concerns may act bearish for gold," she said.
Expectations of the economy improving and foreign institutional investors providing momentum in equity markets are also likely to support gold, Mehta added.
Globally, the yellow metal may rule at US $1,550-1,850 an ounce (31.10 grams) level, she said.
Gold prices last week closed at Rs 30,600 per 10 grams in the domestic market, while in the global markets it was at $1,658 an ounce. With a fair bit of correction already taken place in December due to year-end profit booking, Mehta said, in near term gold is likely to rule at Rs 29,800 to Rs 31,500 range.
"Amid the US fiscal cliff situation the market is expecting the US government to reach at least a partial deal, which will bring in a positive market sentiment that will be positive for gold. Therefore, we expect gold price to recover in January 2013," Mehta added.
Echoing a similar view, Commtrendz Research Director Gnanasekar Thiagarajan said the market is waiting for a very long time for resolution on the US “fiscal cliff” issue. Gold is likely to reach even Rs 33,000-34,000 in the long run in the domestic market, he said.
"The movement in gold price will mainly depend on where the fiscal cliff agreement reaches. If the agreement is in line with the market expectations, the price will pick up, but will subsequently come down and if the conclusion is not in line with the expectation, the gold price will fall with other assets," he said.
In the short term, the yellow metal may come down to $1,565 and rally up to $1,900 overseas and at Rs 28,500-Rs 31,500 in the domestic markets, he added.
Angel Broking associate director Naveen Mathur said gold price in short term would be stable at Rs 30,500-31,000 range as the rupee appreciates against the US dollar. In the international markets, gold is likely to rule at $1,650-1,700 an ounce, he added.