Gold plunges by Rs 220 on global cues

Continued its slide for the sixth straight day, gold prices plunged by Rs 220 to trade at three-week low of Rs 28,280 per 10 grams in New Delhi on Thursday on increased selling by stockists amid a weakening global trend.

Silver also fell further by Rs 350 to Rs 42,650 per kg on poor offtake by industrial units and coin makers.

Bullion merchants said selling pressure gathered momentum as gold retreated to the lowest level in two months in global markets on speculation that the US Federal Reserve will raise borrowing costs earlier-than-expected, strengthening the dollar that dampened demand for the precious metal as a store of value.

Gold in Singapore, which normally sets price trend on the domestic front, fell by one per cent to $1,278.48 an ounce, the lowest level since June 19 and silver by 0.8 per cent to $19.33 an ounce, the lowest since June 12.

Besides, sluggish demand from jewellers and retailers further fuelled the downtrend, they said.

In Delhi, gold of 99.9 and 99.5 per cent purity plunged by Rs 220 each to Rs 28,280 and Rs 28,080 per 10 grams, respectively, a level last seen on August 1. The yellow metal had lost Rs 320 in the previous five sessions.

Sovereign followed suit and lost Rs 100 at Rs 24,600 per piece of eight grams.

In a similar fashion, silver ready dropped further by Rs 350 to Rs 42,650 per kg and weekly-based delivery by Rs 265 to Rs 42,075 per kg.

Silver coins also tumbled by Rs 2,000 to Rs 74,000 for buying and Rs 75,000 for selling of 100 pieces.