Gold may rule at Rs 31,500 by end of this month: Analysts

Gold is likely to be at around Rs 31,500 in near term as it weakens due to selling by stockists at prevailing higher levels, worries over the US fiscal cliff and appreciation of rupee, according to analysts.

"Since the last two weeks there were some corrections taking place in gold mainly due to worries over the US fiscal cliff and the year-end profit booking. Moreover, due policy reforms like clearance of Foreign Direct Investment (FDI) in retail the economy has improved strengthening of the Rupee, which kept gold prices steady in the domestic markets," Kotak Commodity Services Analyst Madhavi Mehta told PTI here.

Looking at the current scenario, gold is likely to rule in the range between Rs 30,500 in the lower side to Rs 31,500 in the higher side per 10 grams in the near terms, she added.
"At present we can also say that the prices are consolidating. But in the long run we still believe the sentiment in gold to remain strong due to strong ETF buying globally and the US economic uncertainty," she explained.

Currently gold on MCX February contract was ruling at Rs 31,300 level and internationally it was at USD 1,705 an ounce (28.34 grams).

Echoing a similar view, Commtrendz Research Director Gnanasekar Thiagarajan said there was some technical weakness due to profit taking as it is the year ending.

Gold had firmed up by 15-16 percent during the year, so now the prices are correcting, he added.

Internationally, since the last two days the US dollar strengthened and fiscal cliff worries is negatively affecting gold, he pointed out.
Gold and USD are currently inversely correlated.