Gold at fresh 10-month low of Rs 28,100 on stockists selling

Gold-Bars-in-Fort-Knox

New Delhi, May 27: Continuing its losing streak for the second straight day, gold prices Tuesday fell by Rs 170 to trade at a fresh 10-month low of Rs 28,100 per ten gram in the national capital on increased selling by stockists.

Silver too fell for the third day and shed another Rs 50 to Rs 41,400 per kg on lack of buying support from industrial units and coin makers. Traders said sentiments continued to remain bearish on persistent selling by stockists after the RBI last week eased import norms on the yellow metal by allowing select trading houses, in addition to already permitted banks, to procure the metal to boost exports.

Besides, easing demand from jewellers and retail customers, who expect prices to come further down, too weighed on the yellow metal prices, they said. The RBI in July last year had imposed severe restrictions on gold imports in order to check burgeoning current account deficit and sliding rupee. The central bank had tied imports with exports and prescribed a 20:80 formula. This facility was available to select banks only and other entities were barred from importing the metal.

A weakening global trend where precious metal declined to almost one-week low as the euro weakened, reducing the appeal of the commodity as a haven, further dampened the sentiment, they added. Gold in Singapore, which normally sets price trend on the domestic front, fell by 0.6 per cent to USD 1,285.50 an ounce, the lowest since May 21, silver by 0.6 per cent to USD 19.31 an ounce.

In Delhi, gold of 99.9 and 99.5 per cent purity fell further by Rs 170 each to Rs 28,100 and Rs 27,900 per ten gram, a level last seen in July last year. Sovereign, however, remained steady at Rs 24,800 per piece of 8 gram in limited deals. Silver ready dropped by Rs 50 to Rs 41,400 per kg and weekly-based delivery by Rs 130 to Rs 40,770 per kg. The white metal had lost Rs 250 in last two trade.