New Delhi: Gold prices continued to feel the squeeze of growing bets for an interest rate hike by the US Federal Reserve as it slumped Rs250 on Wednesday to an over two-month low of Rs28,650 per 10 grams.
The hawkish comments from Federal Reserve officials, including Chairman Janet Yellen, have helped boost expectations that a rate increase is round the corner.
In that case, other assets see a fall in their value. Slack demand from local jewellers, along with a weak trend overseas, only fed the subdued activity. Silver too fell by Rs500 to Rs40,300 per kg due to reduced offtake by industrial units and coin makers.
Traders said the dollar gathered strength on the prospect of a US interest rate hike, which mainly kept gold prices lower.
Globally, gold fell by 0.42% to $1,198.60 an ounce and silver by 0.65% to $16.84 in New York on Tuesday.
In the national capital, gold of 99.9% and 99.5% purity declined by Rs250 each to Rs28,650 and Rs28,500 per 10 grams, respectively. It had lost Rs150 on Tuesday.
Sovereign, fell by Rs200 to Rs24,200 per piece of eight grams. In line with gold, silver ready dropped by Rs500 to Rs40,300 per kg and the weekly-based delivery cracked below the Rs40,000 mark by falling Rs380 to Rs39,970 per kg.
Silver coins too plummeted by Rs1,000 to Rs70,000 for buying and Rs71,000 for selling of 100 pieces.