With higher US interest rates and China’s less gold reserves, global bullion market witnessed the slide of the yellow metal to 5-year low, while the prices of domestic gold plummeted by Rs300 at over two-year low of Rs25,700 per 10 grams on Monday due to weak global trend amid slump in demand from jewellers and retailers.
According to the bullion experts, gold on Monday fell to the lowest level in over five years on the outlook for higher US interest rates and as China said it held less of the metal in reserves than some analysts’ forecast.
Gold slid 1.7 per cent to $1,115.14 an ounce after tumbling as much as 4.2 per cent $1,086.18 an ounce. Silver also shed 0.27 per cent to $14.80 an ounce.
Bullion merchants, however, attributed the steep fall to a weak global trend where it crashed to the lowest level in over five years amid prospects for higher US interest rates which dragged gold prices to this year’s lowest level in the national capital.
“Besides, muted demand from jewellers at domestic spot markets and reports of larger-than-usual sell-off in China, world’s top consumer of gold, weighed on the gold prices,” they said.
Similarly, in domestic trade silver also fell further by Rs150 to Rs34,200 per kg on lack of buying support from industrial users and coin makers.
In futures markets, the prices of yellow metal also fell below Rs25,000 per 10 grams on Monday, thereby tumbling Rs524 after the precious metal sank to over five-year lows in global market.
At the MCX, the gold contract for delivery in August crashed by Rs524, or 2.06 per cent, to Rs24,974 per 10 grams in a business volume of 597 lots at the Multi Commodity Exchange.
Investors have soured on precious metals as the Federal Reserve gets closer to raising US rates for the first time since 2006. Gold fell for the sixth day, losing as much as 4.2 per cent. Prices sank 2.5 per cent last week, the most since March.
Meanwhile, China said at the end of last week that it boosted bullion assets to about 1,658 metric tonnes, less than expected.
Gold in Singapore, which normally determines price trend on the domestic front, lost 4.2 per cent to $1,086.18 an ounce, the lowest price since March 2010 and silver 2.3 per cent to $14.54 an ounce, the lowest since December 2014.
In the national capital, gold of 99.9 and 99.5 per cent purity plunged by Rs300 each to Rs25,700 and Rs25,550 per 10 grams respectively, a level last seen in June 2013.
Sovereign followed suit and fell by Rs200 at Rs22,700 per piece of eight grams. Tracking gold, silver ready fell by Rs150 to Rs34,200 per kg and weekly-based delivery by Rs600 to Rs33,600 per kg.
Silver coins also nosedived by Rs1,000 to Rs49,000 for buying and Rs50,000 for selling of 100 pieces.