Gold may witness bullish trend and prices are expected to cross Rs. 29,000 per

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10 gram by Diwali, according to the Bombay Bullion Association.

“We expect gold prices to shoot up to Rs. 29,000-30,000 per 10 gram by Diwali due to local demand,” Bombay Bullion Association president Prithviraj Kothari told PTI here.

The metal is still considered to be the best bet for hedging as the global economic crisis continue without making any tangible headway, Kothari pointed out.

Standard gold (99.5 purity) was quoting Rs. 26,215, while pure gold (99.9 purity) Rs. 26,355 in Mumbai on Saturday.

Brokerage firm Maya Iron Ores chairman Praveen Kumar said, gold will hover around $1,626-1,650 an ounce, with a slightly negative bias due to poor liquidity with investors, while in the domestic market, it will hover between Rs. 25,970 and Rs. 26,460 per 10 gram in the short-run.

Gold will remain range-bound and is waiting for cues from the European markets. Gold prices witnessed extreme volatility in September, following the deepening European debt crisis. Following this, the metal touched a high of $1,923.7 and a low of $1,535 per ounce in September.

However, as the debt crisis got more confounded, there was massive selling, pulling down the prices by a full 11% to $1,634 an ounce by end September, compared to $1,826 an ounce at the end of August.

Another reason for the fall was the US Federal Reserve’s plan to swap shorter-maturity government securities for longer-dated ones failed to enthuse markets, leading to a massive sell-off in all asset classes, including equities and commodities, Indiainfoline commodity analyst Hitesh Jain said.