Gold prices near year-low level at Rs 27,000 per 10 grams

Mumbai-India (May 29)  Price of gold in the city's bullion market has fallen below the Rs 27,000 per 10 grams mark for the first time in more than 10 months and is now nearing the year-low figure seen in last June, just before the rupee went into a tailspin due to rising CAD. In the city's gold trading hub, gold of the purest quality was selling at Rs 26,850 and on the MCX at Rs 26,660.

Traders said the recent dip in prices was due to the government move to ease gold imports and also because May-June-July are lean months. "Gold trades usually takes off from Raksha Bandhan (in August). Currently, farmers who had bought gold last year after a good harvest, will now come to sell to buy seeds for the sowing season," said Lalit Jagawat, director, Nakoda Bullion.

Last year, after rupee started weakening which finally touched a low of 68.84 to a dollar, the government and RBI had imposed several restrictions on gold imports which artificially kept the prices at an elevated level. With some of the restrictions being eased, gold prices are again coming down.