Mumbai: Gold prices are likely rise up to Rs 34,000 per 10 grams level during Diwali mainly on the back of depreciating rupee and geo-political concerns, according to analysts.

Gold prices are likely to hold in the range of Rs 30,000-34,000 per ten grams until Diwali in the domestic market, and internationally the yellow metal might be in USD 1,260-1,400 an ounce level, Commtrendz Risk Management director Gnanasekar Thiagarajan told PTI here.

“Price would have absorbed the effect of rate hikes and rate hikes would only confirm inflationary expectations, which could increase the appeal for bullion as a inflationary hedge then. And with domestic currency poised to weaken further prices could test previous highs around Diwali,” he added.

In India, gold on June 8 closed at Rs 31,010 per 10 grams and while in New York it closed at USD 1,302.70 an ounce.

Globally, Thiagarajan said, gold prices have been in a range being capped by rising yields and dollar, and supported by global uncertainties and geo-political tensions, but it is holding well in spite of a strengthening dollar.

“With more rate cuts, the dollar could eventually come under pressure as cost of doing business increases in the US. So, I see the possibility of investors moving towards gold by the end of the second quarter in a big way,” he added.

Commodity & Currency managing director Priti Rathi was of the view that gold price is likely to trade in the range of Rs 31,500-31,800 by Diwali.