Come Diwali, and gold is likely to turn drastically cheaper and may rule below Rs 15,000 per 10 grams, but not before reaching a peak of Rs 19,500, as the impact of European debt crisis spreads, Assocham said on Thursday.
Currently, gold is ruling at about Rs 18,300 per ten grams, Rs 40 less than yesterday's Rs 18,340 per 10 grams.
The escalating Eurozone woes that emanated from sovereign debt crisis of Greece, would destabilise stock markets in short-term forcing investors to look for alternative investment channels like gold, the chamber said in a statement.
However, the bail-out package offered to Greece would ultimately stabilise the stock markets and bring down gold prices by Diwali, it said, adding by the beginning of the third quarter of this fiscal, gold prices are expected to start settling down to a reasonable level of below Rs 15,000 per 10 grams.
"In the present situation, gold remains an investment channel in which investors foresee safety net and reasonably good return. It would remain the epicentre for majority of investors until visible stability anchors the Eurozone," Assocham president Swati Piramal said in the statement.
Until visible stability anchors the Eurozone economies, gold prices are expected to be volatile and fluctuate between the range of over Rs 18,000 and Rs 19,500 for the next six months as stock markets would also run through uncertainty in the face of FIIs flows.
The chamber said another reason for making investments in gold is that it does not require any detailed analysis from investment angle for most investors.
The benchmark Sensex had declined 4.4 per cent or 789 points last week as world markets wobbled on concerns that Europe is facing prospects of a protracted debt crisis.
The 27-nation European Union and the International Monetary Fund on Sunday reached a deal on a gigantic euro 750 billion "crisis fund" to defend their common currency euro from attacks by speculators and to help bailout heavily indebted economies facing bankruptcy.
