Gold in free fall, tanks to 22-month low

Written by PTI | Mumbai | Updated: Jun 29 2013, 01:16am hrs
Gold prices crashed to 22-month low at the bullion market here today on hectic offloading by stockists and investors amid mute local buying interest in the backdrop of weak international cues.

Silver also extended losses and fell moderately on speculative selling as well as lack of industrial demand.

Standard gold of 99.5 per cent purity plunged by a massive Rs 880 to end at Rs 25,130 per 10 gm, a level not seen in 22 months, from Thursday's closing level of Rs 26,010.

Pure gold of 99.9 per cent purity also tanked by a similar margin to close at Rs 25,265 per 10 gm from Rs 26,145 yesterday.

Silver ready (.999 fineness) declined by Rs 260 to finish at Rs 40,190 per kg from Rs 40,450 previously.

In Europe, gold nosedived to its lowest level since August 2010, below USD 1,200 per ounce, as fears persisted that the US Federal Reserve will wind down its monetary stimulus soon.

A strong rebound by rupee against dollar today also played its part in gold's sharp decline. The yellow metal has lost more than 10 per cent in nearly two weeks' trade.

"Expect a revival of demand for gold at this level despite ongoing off-season," dealers said.

Spot gold fell to a near three-year low of USD 1,180.71 an ounce and then recovered to USD 1,202.56. In London, spot gold fell to USD 1,180.71 an ounce in

early trade, while silver was up USD 18.19 an ounce.