According to many sources, including economic note to UBS, the world that the coming years will witness an unprecedented rise in gold prices, while those sources confirmed that the U.S. dollar will continue to decline because of the severe cases of inflation witnessed by the economic powers around the world.
Some sources said that the rise will happen up to two thousand, five hundred dollars per ounce while gold prices today do not exceed 40% of the aforementioned figure, while the higher elevations experienced by gold since almost the beginning of March in 2008, rising to 1025 dollars per ounce.
MUMBAI (Reuters) - India gold futures were higher on Tuesday tracking overseas cues, analysts said.
U.S. gold futures hit a six-month high of $1,000 and spot gold also rose to six-month high on Tuesday as the dollar's weakness, concerns about the sustainability of the global economic recovery and worries about inflation underpinned sentiment.
Gold is considered as a safe hedge investment against economic uncertainties for investors who are averse to risk.
The precious metal often moves in the opposite direction to the dollar, as it is seen as an alternative to holding the U.S. currency.
Some market players were cautious about prices sustaining at $1,000, saying the rally had been driven by speculators and gold was an expensive buy in historical terms.
Futures have topped $1,000 nine times -- three times this year and six last year, including a record $1,033.90. Spot prices have risen above $1,000 just four times - once in February and three times in March 2008, when they hit a record $1,030.80.
Indian gold futures are not delivery-based commodities and mirror international trends.
"In today's session we could see highly volatile trading in gold... expect gold to trade on higher side in range of 15,640- 15,900," said Kapil Gandhi of STCI Commodities.
Following are gold prices in rupees per 10 grams on the Multi Commodity Exchange of India Ltd. at 11:29 a.m. :
Contract Current price Net change
The Merrill Lynch has stated in his report that the rise will occur in stages until it reaches its height, the first phase in 2009 and 2010 will be the average prices between thousand dollars and one thousand five hundred dollars an ounce.
while the financial crisis is still at its highest, leading to the continued rise in prices gold, and the stage, followed by Fashaddt decline and the weakness of the U.S. dollar, after the middle of 2010, while the third phase which will see the stability of the currency rates.