Gold dips below Rs 28K, tumbles Rs 620

Continuing its slide for the third straight day, gold prices fell sharply by Rs 620 to trade at two-week low of Rs 27,380 per ten grams on persistent selling by stockists.

Silver too remained under pressure and plummeted by Rs 1,400 to Rs 41,700 per kg on lack of buying support from industrial units and coin makers.

Traders said persistent selling by stockists in line with a weakening global trend after Federal Reserve Chairman Ben Bernanke signalled that the central bank may start curbing stimulus programme this year, mainly dragged gold and silver prices down.

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Besides, sluggish demand in the spot markets due to off-marriage season weighed on gold prices, they said.

Gold in New York, which normally sets price trend on the domestic front, recorded a steep fall of $73.50 to $1,277.50 an ounce, its lowest level since September 2010 and silver plunged by 8.18 per cent to $19.60 an ounce last night.

On the domestic front, gold of 99.9 and 99.5 per cent purity suffered a setback of Rs 620 each to Rs 27,380 and Rs 27,180 per 10 grams, respectively.

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The yellow metal had lost Rs 480 in last two sessions.

Sovereign held steady at Rs 24,200 per piece of eight gram.

In line with a overall weak trend, silver ready and weekly-based delivery plunged by Rs 1,400 each to Rs 41,700 and Rs 41,050 per kg, respectively.

The white metal had tumbled by Rs 1,500 on Thursday.

On the other hand, silver coins continued to be enquired at previous levels of Rs 78,000 for buying and Rs 80,000 for selling of 100 pieces.