The price of 24 carat gold in India reached a 25-year high of over 9,000 rupees (209 US dollars) per 10 grams Monday while experts said it will soar further, Indo- Asian News Service reported.

Mutual funds had entered the market and invested their spare funds in gold and other metals pushing up prices to a 25-year high, said Shri Krishan Goyal, general secretary of Delhi Bullion Merchants Association.

In the international market, gold was trading at 604-607 U.S. dollars per ounce on Monday.

The rural buyer was a major segment that drives jewelry demand growth in India. The country remained the largest importer and consumer of the yellow metal in the world as it has traditionally regard gold as a major security asset.

But bullion dealers said the demand for gold is led by fund managers instead of consumers.

"As we see it, the demand is not led by consumers but by investors who are keen to park their surplus funds in metals - not just gold but other like silver, zinc and copper as is evident from the trend in commodities trading," said Rakesh Saraf, general secretary of All Delhi Jewellers Association.

People are expecting the price to stabilize as it should after such a long period of volatility but this does not seem likely in the short term, Saraf said.

Instead, gold is likely to scale 12,000 rupees (279 US dollars) per 10 grams by September before Diwali, he added.

Source: Xinhua