The Hindu Business Line : Gold drops further as demand erodes

NEW DELHI: Gold prices fell for the third day in a row on Tuesday on waning demand as stocks and the rupee continued to be the favourite of investors.

Gold, after a whopping loss of Rs 430 in the last two sessions, dropped further by Rs 270 at Rs 14,380 per 10 gram in the bullion market here as investors preferred to put money in the surging equity markets than in bullion.

A similar trend was noticed in silver as prices tumbled by Rs 200 at Rs 21,800 per kg on reduced offtake. Gold prices yesterday declined by a sharp Rs 380 per 10 gram following a 2,111 points surge in the stock markets.

The stock indices yesterday hailed the return of the UPA to power, with the BSE Sensex surging to a historic level and gained 2,111 points in a single day and rupee also recorded its highest gain in more than a decade.

"The ongoing changing scenario on the financial front will put more pressure on the gold prices in the coming sessions as money is seen diverting to the attractive stock markets,'' said, Mr Sheel Chand Jain, president of the All India Sarafa (Bullion) Ba zar Association.

A steep fall in the gold prices in the overseas markets was another dampening factor. The metal fell to 918 dollar in Asian region from 930 dollar in the US markets. - PTI

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