Gold nosedives after record highs on weak global cues

Gold nosedives after record highs on weak global cues

New Delhi: After breaching Rs14,000-mark gold prices Sunday tumbled by Rs540 to close at Rs13,460 per 10 gram on the bullion market as investors turned frantic sellers on weakening global front amid melting equity markets.

Standard gold and ornaments fell by Rs540 each at Rs13,460 and Rs13,310 per 10 gram respectively. The yellow metal had gained over Rs1,120 in last three days. Sovereign also fell by Rs500 at Rs10,500 per piece of eight gram.

Marketmen said selling pressure gathered momentum after the US stocks plunged to over six years low on fears of deepening financial crisis, and investors were forced to liquidate their holdings in other assets to pay margins.

“Recent prices rises have caused some profit selling in India, despite the festival month," said Rakesh Anand of R.K. Jewellers, adding the market completely moving with the global trend and even not withstanding with demand for Diwali festival.

Another Delhi-based jeweller Mahesh Verma of Omsons Jewellers said there was heavy selling of old jewellery and bars by retail customers to book profits at higher levels.

On the global front, which normally set prices in domestic markets here, gold suffered the most as foreign funds rushed to off-load part of their holdings in precious metals to raise funds to pay for badly hit stock markets.

Silver also experienced a free fall and plunged Rs16,00 at Rs18,350 per kg and weekly-based silver by Rs2,340 at Rs18,430 per kg on withdrawal of support from speculators.

While in New York silver dropped below $10 an ounce, a two years low level, gold traded in a wide range of more than $100 an ounce following a turmoil in the global financial markets. The gold rose to over two months high of $931 and tumbled to a low of $824 an ounce.