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Gold prices may drop further

Gold prices may drop further
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First Published: Sun, May 04 2008. 03 45 PM IST
Updated: Sun, May 04 2008. 03 45 PM IST
PTI
Mumbai: Gold prices may see some correction, a top industry official said here.
In line with the international market, gold price in local market are also expected to see some more correction in coming days, Bombay Bullion Association, President, Suresh Hundia told PTI on Sunday.
In the local market, gold prices held above a psychological Rs 11,000 per 10 grams.
In the international market, the gold price slipped to 13 week low to trade at USD 862.40 per ounce as bond yields ticked higher following 0.25 per cent rate cut announced by the Federal Reserve last week.
The demand of gold is expected to rise due to fall in gold prices, during the current Akshaya Tritiya festival. Every year, gold coins worth three to four tonnes are sold during this auspicious Hindu festival, Hundia said.
“Gold imports are expected to improve in May and may be at around 40-50 tonnes as prices have declined and also physical buyers who were on the sidelines bought the yellow metal to stock it up before the wedding and festival season,” Hundia added.
The benchmark June gold futures contract on the Multi Commodity Exchange (MCX) fell 1.5 percent to Rs 11,205 per 10 grams on Thursday, its lowest level since mid January.
“There is a fear that gold might go down if the Dollar fails to weaken. Long term gold holders are exiting long positions,” believes bullion analyst Ajit Zaveri.
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First Published: Sun, May 04 2008. 03 45 PM IST