Gold prices may cross the Rs 33,000 level on 'Dhanteras', a day considered auspicious for buying the precious metal, on account of rising demand amid tight supplies, experts and bullion traders say.
Despite the expected price rise, the festive demand for jewellery on 'Dhanteras' on November 1 is expected to remain stable, but sale of coins and bars would see a decline by almost 50 per cent from the year-ago period, they estimated.
The all-time record for gold prices is Rs 34,500 per 10 grams in the New Delhi market. The precious metal hit this level on August 28 this year.
Currently, gold prices are ruling at Rs 32,570 in the national capital and around Rs 31,700 in Mumbai, trade data showed.
"There is bearishness in gold prices at present. But some run up in prices are expected, say an increase of Rs 300-1,000 per 10 grams on the Dhanteras day, due to higher premiums with squeeze in supplies," city-based brokerage firm SMC Comtrade Chairman and Managing Director D K Aggarwal told PTI.
Premium on gold could further increase from the existing level of Rs 1500-2000 per ten grams if demand-supply gap widens on the festival day, he said.
However, the year-on-year jump in domestic gold prices on Dhanteras this year would be very small from over last year's period because of weak global factors, he added.
As per the trade data, gold prices rose by 20 per cent to Rs 32,485 per 10 grams on Dhanteras day in 2012. Rates jumped by 37 per cent to Rs 27,130 per 10 grams on the festival day in 2011. In 2010, gold prices on Dhanteras day stood at Rs 19,740 per 10 grams.
In the domestic market, gold is being sold at a high premium due to supply crunch caused by government measures to restrict the import of precious metal in an effort to cut current account deficit.
All India Gems and Jewellery Trade Federation Chairman Haresh Soni said: "Impact of high gold premiums will be there on prices on the Dhanteras day because supplies have dried up in the absence of imports in the last three months due to government curbs."
Jewellers are depending on recycled gold to meet the coming festive and wedding demand. They are also geared with innovative schemes to attract customers, he added.