Kolkata: Gold is set to become costlier in India due to a weakening rupee, which may dent demand in the upcoming wedding season, but long-term investors in the yellow metal can hedge themselves against the price rise and benefit from it, said industry executives.

Gold prices have increased Rs 250-300 per 10 grams as the rupee has depreciated against the dollar, said Ashish Pethe, chairman of All India Gem & Jewellery Domestic Council. “But since internationally gold prices have not jumped, we might not see an immediate spike in gold prices in India,” he said.

However, if the Omicron variant of Covid-19 leads to a surge in cases, gold prices may start increasing sharply in the coming days, he said.

Already, Pethe said, the volatility in prices is impacting consumer sentiment. “They are on a wait and watch mode. If prices start moving up, then the wedding season demand will get affected. We are witnessing a little slowdown in the movement of goods,” he said.

Globally, gold prices rose 0.3 per cent in early morning deals on Thursday because even though the US Federal Reserve’s stance has been on expected lines and the market has factored in monetary tightening in the coming days.

According to experts, the immediate support for gold in the spot market, at $1,760 per ounce, is holding well and it may go up to $1,835 per ounce in the coming fortnight to one month.

“Gold prices will not witness a spike as they did in August 2020, when prices had touched Rs 57,000 per 10 gm,” said Bhargav Vaidya, a gold trade analyst. “Definitely, a price hike may have some temporary impact on gold demand but that will be very short-lived. We remain bullish about gold, and the long-term investor can buy on dips now and can benefit in the coming days.”

Price rise in gold will give investors a window to hedge against inflation, said Vaidya. “The way things are moving, it is expected that inflation is there to stay for some time. Gold always helps in these times,” he said.