Gold prices suffered the steepest fall in a week on Thursday, falling R1,250 to R30,950 per 10 grams on a heavy sell-off by stockists as equity markets and the rupee recovered after the RBIís fresh measures.
Silver also plunged by R1,800 to R53,700 per kg on poor offtake by industrial units and a weakening trend in overseas markets.
Traders said the precious metals fell sharply following fast recovery in the rupee against the dollar after the new RBI chief announced measures to boost economic growth. The rupee was trading higher by 84 paise at R66.24 per dollar while stock markets were up by over 2%, denting the appeal of gold, which is considered a safe haven during economic turbulence.
RBI governor Raghuram Rajan came out with a slew of measures to rescue the battered financial markets to boosting growth.
Traders said a weakening trend in overseas markets on expectations for reduced stimulus in the US and limited military strikes against Syria further influenced the sentiment.
Gold in Singapore, which normally sets the price trend on the domestic front, fell 0.7% to 1,381.35 dollar an ounce and silver by 0.9% to 23.27 an ounce.
On the domestic front, gold of 99.9% and 99.5% purity suffered R1,250 loss each to quote at R30,950 and R30,750 per 10 grams, respectively. It had gained R1,100 in the last two sessions. Sovereign declined by R200 to R25,100 per piece of eight grams.
Silver ready dropped by R1,800 to R53,700 per kg and weekly-based delivery by R2400 to R54,600 per kg. Silver coins also fell by R1,000 to R88,000 for buying and R89,000 for selling of 100 pieces.