As the downward trend continues, the prices of domestic gold fell below the psychological mark of Rs25,000 on Wednesday. The domestic bullion hub witnessed the fall as the lowest level in four-years in late morning trade on the back of heavy unwinding by stockists and speculators.
In Mumbai bullion trade, the price of pure gold (99.9 purity) fell below Rs25,000-mark by tumbling Rs300 to Rs24,820 per 10 gram. Similarly, silver also dropped by Rs175 to Rs34,550 per kg compared to Rs34,725 on Tuesday.
The slide mainly attributed to global spill-over where the broad-based commodities bore the brunt of investors’ panic selling recently amid a flash-crash worldwide. “Speculators and investors are taking out profits fearing the yellow-metal may fall further as overseas traders are bearish on gold at this juncture and cashing out their long positions,” a bullion trader commented.
In the National Capital, gold of 99.9 and 99.5 per cent purity slumped by Rs300 each to Rs25,250 and Rs25,100 per 10 gram respectively, its weakest level since August 8, 2011. “Buyers are deferring their purchases, anticipating further dip in gold prices in coming days,” Rakesh Anand of R K Jewellers in the National Capital said.
Similarly other cities also followed the trend. At Chennai, standard gold fell by Rs290 to Rs25,220 per 10 gram. In Kolkata, standard gold (99.5 purity) or 22-carat gold fell below Rs24,000 per 10 grams price for the first time in seven years. Standard gold was quoted at Rs23,985 per 10 gram, down Rs 235 from on Tuesday.
On the global front, the yellow metal on Wednesday retreated for the 10th day in the longest run of losses since 1996 as Goldman Sachs Group predicted further declines and investors sold more through funds.
Bullion has fallen out of favour with investors as the US Federal Reserve prepares to raise interest rates, boosting the dollar and hurting gold’s allure. “Prices could fall below $1,000 for the first time since 2009,” said Jeffrey Currie, Goldman’s New York-based head of commodities research.
Gold retreated 0.6 per cent to $1,094.43 and silver lost 0.4 per cent to $14.73 an ounce. The metal dropped 6.1 per cent as it fell every day since July 9 in New York.
The shiny-metal remained under intense selling pressure on funds unwinding despite a weaker dollar. Spot gold was down at $1,095 an ounce in early European trading and silver was quoted at $14.72 an ounce.