Gold prices to bounce back

Even as rupee fell further vis-� -vis US dollar and supply of gold escalated in the local market, yellow metal recorded an overall decline of Rs 290 per 10 gm during the week ended on Saturday. Speculators are indeed in the dilemma of 'to buy or not to buy', though seasoned market players are quite optimistic that gold prices will bounce back in two weeks from now. The current account deficit (CAD) has recently touched 7.5 per cent mark. In absolute terms, the foreign trade deficit now accounts for over $200 billion which is a cause of worry. No doubt increasing the import duty on gold has curtailed the increase of CAD, but experts feel that much more needs to be done in this direction. On the closing day of the week, the net decline in the price of Standard gold (24 carats) over last week stood at Rs 290 at Rs. 27,700 per 10 gm from the previous week's closing of Rs 27,950. Ornamental gold followed the suit and was quoted in the range of Rs 27,050-27,150 against Rs 27,300-27,400 in the previous week. Silver too declined by Rs 800 and closed at Rs 46,200 per kg against previous week's closing level of Rs 47,000. The overall sentiment in principal markets for essential commodities and Kirana goods in Risala Abdullah, Osmangunj, Begum Bazar, General Bazar, Dilsukh Nagar, Mir Alam Mandi , Bowenpally and Kukatpally remained firm. With the met office's forecast of ensuing monsoon to be normal by 97 per cent, hoarders are now a worried lot. A case in example is of turmeric. The increased supply has upset the plans of hoarders who were expecting lower arrivals in the market. Coriander, chilli , cumin seeds and turmeric are other instances where the arithmetic of hoarders has gone awry. Sugar after partial decontrol has been ruling within expected brackets. Common edible oils remained moderately low throughout the week. Among others, moong and its daal remained unchanged at their last week's closing levels while chana and its daal recorded a marginal increase of Rs 40 per quintal owing to the good arrivals. Dr Hc Upadhyay