Gold prices plunge by Rs 600 on weak global cues

Gold prices plunged by Rs 600 to Rs 26,500 per 10 grams in New Delhi after the precious metal slumped to the lowest level since 2010 in global markets as the strengthening dollar eroded demand for the commodity.

Besides, subdued demand from jewellers and retailers following end of festive season and shifting of funds towards soaring equity markets, weighed on prices of the precious metal.

Silver followed suit and recorded a sharp fall of Rs 1,700 to Rs 36,150 per kg on poor offtake by industrial units and coin makers.

Bullion merchants said a weak trend in global markets as US economic data and a stronger dollar eroded demand mainly put pressure on the precious metal prices.

Further, a subdued trend at the domestic markets as demand dried up due to end of festive season, dampened sentiments, they added.

Gold in Singapore, which normally sets price trend on the domestic front, fell 2.6 per cent to $1,167.49 an ounce, the lowest since July 2010 and silver plunged three per cent to $16.00 an ounce, the lowest since February 2010.

Besides, investors shifting funds towards soaring equity market also had a negative impact.

In Delhi, gold of 99.9 and 99.5 per cent purity dropped further by Rs 600 each to trade at over one-month low of Rs 26,500 and Rs 26,300 per 10 grams, respectively. It had lost Rs 400 on Thursday.

Sovereign followed suit and declined by Rs 200 to Rs 23,900 per piece of eight grams. Silver ready dropped by Rs 1,700 to Rs 36,150 per kg and weekly-based delivery by Rs 1,980 to Rs 35,580 per kg.

Silver coins also nosedived by Rs 4,000 to Rs 61,000 for buying and Rs 62,000 for selling of 100 pieces.