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Gold and silver continued to plunge in India, on the heels of a bearish trend in the global market.
Silver dropped by over 10 per cent in Mumbai to Rs 48,740 a kg (down Rs 5,535) and 22-carat ornament gold slid 5 per cent to Rs 25,590 for 10 gm (down Rs 1,270). Pure gold was down by same margin to Rs 25,715.
In London, spot gold dropped to an 11-week low of $1,534.49 an ounce before edging back to $1,558.39 by 1230 IST. This month, the yellow metal has lost nearly 15 per cent so far and it is the biggest decline since the financial crisis in October 2008.
Spot silver dropped 16 per cent at one point to $26.04. It is the lowest since November last year. It, however, rebounded to $27.97, a fall around 10 per cent. The white metal has lost over 25 per cent of its value in just three sessions.
“Gold and silver are falling in India following world market. There is selling to meet margin, for liquidity and to cover margins,” said Mr Prithviraj Kothari, President of Bombay Bullion Association.
“We have never seen such steep fall in gold and silver prices in the last three decades,” he said. That, however, is not deterring consumers from buying precious metals, according to Mr Kothari. “There is huge buying. The fall will stop and prices will stabilise in a couple of days,” he said.
“Buyers seem to be in wait-and-watch mode after prices in Chennai dropped by Rs 83 a gm for gold,” said an employee of a jewellery firm who did not wish to be identified. But jewellery outlets in Chennai reported higher business on Sunday.
“We should have had 25 per cent more than normal business on Sunday,” said the employee. Buyers were reportedly buying even silver bars and titanium tungsten. Globally, investors are fleeing bullion to cash and dollar that are now perceived a haven.
Fears over debt crisis in the Euro zone could affect global economy and this is causing investors to sell commodities, including gold and silver, and flee to safety.
Meanwhile, gold futures fell 4.7 per cent to $1,563.40 an ounce, and silver tumbled as much as 13 per cent to $26.15.
On India’s Multi Commodity Exchange, gold for October delivery was down 2.3 per cent to Rs 26,028 for 10 gm. Silver for December delivery was quoted 5.2 per cent lower at Rs 50,590 a kg. Futures trading in both metals was volatile.
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