India gold seen above 13,000 this year on financial woes

By Ruchira Singh

MUMBAI (Reuters) - Indian gold prices are seen above 13,000 rupees per 10 grams at the end of the next two quarters as the world reacts to high inflation, financial turmoil and geo-political tensions by buying more of the yellow metal, a Reuters poll showed.

The median of a forecast by 14 banks and commodity brokerages showed the price at 13,500 rupees at the end of September and 13,400 rupees at the end of December.

The median of the average price of the metal in 2008 was at 12,598.5 rupees.

"Gold is being more of a safe haven," said Rajan Venkatesh, managing director, India Bullion, at ScotiaMocatta, one of the prominent sellers of precious metals in India.

"It is the U.S. economy, crisis in the financial market, the fact that the U.S. Federal Reserve is not giving enough confidence to the dollar and equities not doing well, that is making people buy gold."

On Thursday, the August gold futures on the Multi Commodity Exchange of India Ltd (MCX) was at 13,274 rupees, down 3.6 percent from an all-time high for futures on Tuesday.

But the current price is up 52 percent on year when seen on MCX's continuation chart.

The poll showed gold is not expected to remain steadily at higher levels.