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Gold prices continue to nosedive as demand refuses to pick up

The other precious metal, Silver, also fell by Rs 210 to Rs 38,600 per kg on a reduced offtake by industrial units and coin makers.

Published: 27th December 2016 01:20 AM  |   Last Updated: 27th December 2016 07:02 AM   |  A+A-

2016-12-06T011318Z_1_LYNXMPECB5013_RTROPTP_3_INDIA-GOLD-SCRAP

For representational pupose (File | Reuters)

By Express News Service

NEW DELHI: The nosedive that gold prices have been seeing over the last few days, driven by both a demand slump from jewellers and unfriendly global cues, continued to extend on Monday with gold prices slumping by Rs 250 to hit over 11-month low of Rs 27,550 per 10 gram at the bullion market in the national capital. Lower advices from the futures trade also spurred the fall. 

The other precious metal, Silver, also fell by Rs 210 to Rs 38,600 per kg on a reduced offtake by industrial units and coin makers.

According to traders in the market, the persistent fall in demand from jewellers and retailers in view of prevailing cash crunch triggered by the demonetisation of old high denomination notes have been the primary factor weighing on gold prices.

“The demand from jewellers still has not returned and we feel it is unlikely it will return anytime in the next few days. Unless liquidity is normalised, demand is likely to be low until the start of the next marriage season,” said a billion market analyst. 

Investors have also been affected by the ambiguity in future trends as major world markets such as Singapore, which rule price trends in local markets largely, were closed for a holiday.

Meanwhile, gold in futures continues to trade below the 27,000 level in afternoon. 

The February contract of the metal fell to a low of Rs 26,916 per gram on MCX commodity exchange. It was trading lower by Rs 14 at Rs 26,980.00 per 10 gram in afternoon trade.

In the local spot market, gold of 99.9 per cent purity plunged by Rs 250 to Rs 27,550 per 10 gram, a level not seen since February 4. Gold of 99.5 per cent purity too plunged by Rs 250 to Rs 27,400 per 10 grams. 



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