Gold and base metal prices had advanced, as signs of solid factory growth in China and Europe gave the global manufacturing sector a solid boost heading into the new year.
Gold XAU appreciated after recording losses initially, with the precious metal adding about 0.5 percent to $1,157.40.
Meanwhile, Gold prices are expected to remain muted for the next three to six months, which is likely to trigger demand in India, said commodity experts and bullion traders.
“Gold is all set to become more attractive in the Indian context. Demand in India has gone down sharply in 2016. In the next three to six months, demand is likely to rise as gold prices may fall by at least 3-4%.
There will be a Rs 500-Rs 800 drop in gold prices per 10 gm which will make consumers invest in gold,” said Shekhar Bhandari, business head for global transactions (banking and precious metals) at Kotak Mahindra Bank.
Gold is hovering around Rs 27,400 per 10 gm at the moment. However, strengthening of dollar against the rupee is a matter of concern for the gold trade.
India is a net importer of the yellow metal and is the second largest consumer in the world. Analysts said there’s no immediate trigger for gold prices to go up suddenly in the short to medium term.
