New Delhi, April 16:

The already rising gold prices are expected to touch Rs 10,000 Indian Currency (IC) ($220) per 10 grams in view of unending demand and investors’ preference for it over a weakening US dollar, says an industry study released today.

The study, ‘Yellow Metal: Its Future Pricing Trends’, prepared by the Associated Chambers of Commerce and Industry in India (Assocham), pointed out that the dollar has already lost its lustre by 40 per cent against the euro since 2001. “This trend is unlikely to be reversed in the future as the faith of the international co-mmunity in the US economy has been shaken up so much that it has survived its saturation and now the US economy has started aging,” it stated, “The trend has beco-me so pronounced that investors prefer to accumulate gold rather than dollar.”

Releasing the paper, Assocham president Anil K Agarwal said, “The chamber estimates that the gold prices by October are likely to reach within the range of Rs 10,000 IC per 10 grams and would even exceed Rs 13,000 IC per 10 grams subsequently.” On Friday, standard gold was quoted at Rs 8,830 IC for 10 grams in the Indian bullion market.

The study noted that gold is at the very beginning of a multiyear bull market that will take the yellow metal price at several times higher levels than the present ones. The study echoed the findings of the London-based global metals consultancy GFMS Ltd, which in its latest report earlier this week forecast possibilities of gold scaling from the present level of over $600 per ounce to above the all time high levels of $850 witnessed in 1980.

“Commodities in general and precious metals in particular are in motion and will continue rallying until acted upon by a credible global monetary force. There is no powerful rocket fuel for a gold bull market than a collapsing US dollar,” the study stated. The paper also highlighted that in the US economy, 300,000 jobs have been lost in the manufacturing sector alone in the last five years. This is an indicator of the US dollar losing its pre-eminent position as most preferred investment instrument. The gold demand the world over is constantly shooting up and has neared levels of around 4,000 tonnes a year while its supplies have remained stagnant at about 2,250 tonnes per annum.

Since the dollar is losing its glare and glitter, the emerging trend among the investing communities would be to develop and widen their yearning for yellow metal accumulation which will drive its price upwards, according to the study. The gap between supply and demand will continue to widen as there have been no significant discoveries in the major gold producing countries while gold’s consumption pattern will always enlarge because it is deemed to be a ‘real currency’ the world over, stated the study.

In India, the world’s largest gold consumer with an annual demand of 800 tonnes, gold is valued as a savings and investment vehicle and is the second most preferred investment option after bank deposits. The gold hoarding tendency is well ingrained in Indian society as its domestic consumption is dictated by the monsoon, harvest and the marriage season. These factors also will lead to an increased demand and supply gap for the yellow metal and cause higher price fluctuations in the international markets.