With the approaching marriage and festive season gold prices may cross Rs 14,000 per 10 grams, a top industry official said.
Standard gold was quoting at Rs 13,105 and pure gold at Rs 13,170 per 10 gram in the Mumbai bullion market on Monday.
"Gold prices may start hardening and cross Rs 14,000 per 10 grams in November due to heavy demand," All India Gems and Jewellery Trade Federation (GJF) Chairman Ashok Minawala told PTI on the sidelines of a conference here on Monday.
"We have seen a 40 per cent drop in gold demand during January to April. However, there was a 25 per cent growth in May-July. Since August demand has flared up," Minawala said.
Gold is considered a very strong commodity when currencies remain volatile. Investors shift their investment from the capital market to hedge in gold and the same was happening at the moment, Minawala said, adding "there is a huge demand for gold jewellery in the US due to the forthcoming Christmas festival."
Asked on short supply and premium on gold, Minawala said that presently, there was a problem of supply of gold in the market.
"Gold is not easily available and banks too are not able to supply the gold. Import is also not happening on time and is not keeping up with demand," he said.
India imports 700 tonnes of gold every year and produces roughly 2 tonnes of gold from its captive mines.