New Delhi, Sep 12 (IANS): Gold price may surge to a record Rs.22,000 per 10 grams by the end of this year as uncertainty in the US and European economies forces investors to bank on the precious metal.

During the forthcoming festival season, gold price is likely to hover around Rs.21,000 per 10 grams, according to a survey conducted by the Associated Chambers of Commerce and Industry (Assocham).

It says that bullion prices would continue to head northwards until correction starts in the capital markets.

Major players in the capital markets, including mutual funds, are holding huge cash balances and investing in precious metals in anticipation of corrections in the capital markets.

"Until corrections resume in equity market, these funds would go on making a beeline to commodities, more specifically bullion, which has taken gold and silver to all time high," Assocham report said.

Assocham said rising inflationary pressure across the world and uncertainty in the US and the Euro-zone economies were among the major reasons behind the surge in gold price.

"This is likely to continue in the foreseeable time, raising hopes for a further hike in bullion prices," it added.

High gold prices are likely to negatively affect jewellery business in the country as demands remain subdued.

According to the report, nearly 40 percent jewellers have already put their shutters down in Ahmedabad because of negligible sales. "This is likely to further escalate and force these businesses to look for alternate sources of income."