Gold prices witnessed a dramatic rebound after a sudden overnight flash crash from its historic high at the domestic bullion market today on frenzied retail investment buying amid heavy speculative offtake.

Silver also gained marginally owing to some low-level buying support.

The precious metals had succumbed to heavy unwinding by speculators and savvy traders yesterday, leading to a massive price correction with gold sinking by 5 per cent and silver by 7 per cent.

Riding high on the back of sinking rupee value amid supply crunch owing to import curbs as well as strong stockists and jewellery demand ahead of festive and wedding season, the yellow metal had attained the new milestone of Rs 33,000 per 10 gm on Wednesday.

Standard gold of 99.5 per cent purity rose Rs 430 to finish at Rs 31,950 per 10 gm from Friday’s closing level of Rs 31,520. Pure gold of 99.9 per cent purity soared Rs 440 to to conclude at Rs 32,120 from Rs 31,680.

Silver ready (.999 fineness) moved up by Rs 85 to end at Rs 55,110 per kg compared with Rs 55,025 yesterday.

In the global markets, the yellow metal suffered a major setback and slumped below the key psychological level of $1,400 an ounce following investors’ selling amid easing fears over an imminent military action on Syria.

Gold for December delivery fell $16.80 to settle at $1,396.10 an ounce on the Comex division of NYMEX late yesterday and silver for December contract also lost 63 cents to $23.51 an ounce.

(This article was published on August 31, 2013)
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