Gold at 2-week low on easing of import curbs by RBI

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New Delhi | Published: November 29, 2014 3:56:53 PM

Gold prices today plunged by Rs 270 to trade at over two-week low of Rs 26,400 per ten gram in the national capital...

Gold prices today plunged by Rs 270 to trade at over two-week low of Rs 26,400 per ten gram in the national capital after the Reserve Bank yesterday eased curbs on import of the precious metal.

Silver also extended losses for the third day and tumbled by Rs 820 to Rs 35,380 per kg on poor offtake by industrial units and coin makers.
Easing restrictions on gold imports, the Reserve Bank yesterday scrapped the controversial 80:20 scheme.

Under the 80:20 norm, put in place in August 2013 to curb high gold inflows that was widening the current account deficit, at least 20 per cent of the imported gold had to be mandatorily exported before bringing in new lots.

Bullion traders attributed the fall in gold prices to easing restrictions on gold imports by the RBI by scrapping the controversial scheme, which is likely to enhance supplies and check smuggling of the precious metal.

“The RBI move will improve supplies in the market and bring down gold prices further in coming days,” All India Sarafa Association vice-president Surinder Kumar Jain said, adding the strengthening dollar, however, will limit fall in prices.

He said the import curbs had restricted availability of the basic raw material for the jewellery sector.

Besides, a weak global trend where gold weakened as a stronger dollar and falling crude prices, curbing demand for the precious metal, weighed on the gold prices.

Gold in global market, which normally sets price trend on the domestic front, fell by 1.80 per cent, the biggest fall since November 5, to 1,175.50 an ounce in New York.

Silver too tumbled by 6.3 per cent, the biggest drop since June 2013, to USD 15.55 an ounce in yesterday’s trade.

In Delhi, gold of 99.9 and 99.5 per cent purity plunged by Rs 270 each to Rs 26,400 and Rs 26,200 per ten gram respectively, a level last seen on November 12.

Sovereign traded lower by Rs 100 to Rs 23,600 per piece of eight gram.

In line with weak trend, silver ready also recorded a hefty fall of Rs 820 to Rs 35,380 per kg and weekly-based delivery by Rs 1,085 to Rs 34,525 per kg.

On the other hand, silver coins remained steady at Rs 61,000 for buying and Rs 62,000 for selling of 100 pieces.

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