Gold dips below 29k level on weak demand

Gold prices dipped below the 29K mark to a three-week low of Rs 28,840 per 10 gm, down by Rs 475, in the national capital today on continued selling by stockists sparked by a weakening global trend amid drying up demand.

Silver also dropped by Rs 700 to Rs 54,300 per kg on reduced offtake by industrial units and jewellery makers.

Trading sentiment remained bearish after gold and silver slumped to the lowest levels in four months in global markets as Greek leaders struggled to form a government, increasing concern deepening euro zone crisis and boosting the dollar.

The dollar-priced gold in global markets, which normally set price trend on the domestic front here, fell 1.1 per cent to USD 1,587.28 an ounce, the lowest since January 3 and silver by 1.8 per cent to USD 28.92 an ounce, the cheapest since January 9.

In addition, domestic demand dried up due to off-marriage

season and retailers refrained from buying at such costly levels further dampened the sentiment.

On the domestic front, gold of 99.9 and 99.5 per cent purity suffered a setback of Rs 475 each to Rs 28,840 and Rs 28,700 per 10 gm. The metal has plunged Rs 435 in last three sessions. Sovereign followed suit and declined by Rs 50 to Rs 23,700 per piece of eight gram.

Similarly, silver ready nosedived by Rs 700 to Rs 54,300 per kg and weekly-based delivery by Rs 625 to Rs 54,680 per kg, in continuation to a fall of Rs 1,250 in two days.

However, silver coins held steady at Rs 63,000 for buying and Rs 64,000 for selling of 100 pieces.