Gold Prices Fall To a Three Year Low
Gold prices in India plunged by Rs. 450 on Wednesday and traded at Rs. 25,900 per 10 grams in New Delhi. This is the first time that the gold prices have dropped to about Rs. 450 per 10 grams in three years. The strength of the dollar was the reason behind the drop in demand for the precious metal. There was a low demand for the precious metal among jewelers and retailers as the preferred to hold back their buying on Wednesday in anticipation of further drop in the price of gold.
Silver also followed suit and sold at Rs. 35,050 a kg. It had recorded a fall of Rs. 900 a kilogram on Wednesday. The off take of silver by industrial units and the coin makers was poor. Bullion traders feel that the strength of the dollar is what is causing the sudden plunge in the gold and silver prices. The weakening trend in the global market is the reason for this sudden plunge. Above all, the retailers and the jewelers are also delaying their buying with the expectations that the prices of the yellow metal and silver will further come down.
There was a sharp drop in the prices of gold in Mumbai and it hit a 16 month low at the domestic bullion hub. The investors and the speculators got into panic selling of their gold stocks seeing the prices crash in the global markets. Silver was it the most in this panic situation as it plunged to a four year low to close below the key Rs. 36,000 a kg mark. This serious plunge was due to massive liquidation of the white metal in the market.
The standard gold with 99.5 purity saw a fall of Rs. 500 and ended at Rs. 25,600 per 10 grams and it was previously at Rs. 25,955. Pure gold with 99.9 purity sold at Rs. 25,600 per 10 grams on Wednesday when compared to previous value of Rs. 26,105, which means it witnessed a sharp drop of Rs. 505. Silver, on the other hand, saw a huge drop of Rs. 1440 to end the day at Rs. 35.360 per kg. The Tuesday’s closing figure of .999 fineness silver stood at Rs. 36,800.
Gold recorded a fall of 2.4 per cent on Wednesday in the global market which is said to be its lowest recoded fall since the mid of 2010. Silver’s rate in the global market was even lower and it hit its weakest fall since February 2010.