Domestic gold prices tumble on reduced demand

Mumbai-India (Dec 15)  Gold prices plunged at the domestic bullion market in Mumbai on Thursday following sustained selling by stockists and investors coupled with subdued local buying interest. Gold prices fell overseas after the US Federal Reserve raised interest rates for the first time in a year and signalled more rate hikes in 2017.

Silver cracked below the Rs41,000-mark by falling Rs1,410 per kg owing to lack of industrial buying support. Standard gold (99.5 purity) dropped by Rs550 to end at Rs27,350 per 10 grams from Wednesday’s closing level of Rs 27,900. Pure gold (99.9 purity) also moved down by a similar margin to Rs27,500 per 10 grams as compared to Rs28,050 earlier. Silver (.999 fineness) slumped by Rs1,410 to conclude at Rs40,200 per kg as against Rs41,610 previously.

Globally, gold hit its lowest since early February, after the Federal Reserve sounded an unexpectedly hawkish note on US interest rates, sparking a surge in Treasury yields and sending the dollar to a 14-year high. Spot gold hit a 10-1/2 month low of $1,132.15 an ounce, and was down 1% at $1,132.70 an ounce in early trade. US gold futures for February delivery were $30.30, or 2.6 %, lower at $1,133.40.

Meanwhile, silver was down 2.2% at $16.46 an ounce.

Source: LiveMint