New Delhi: Falling for the third day in succession, gold prices Tuesday plunged by Rs 1,160 per ten grams to 21-month low at Rs 26,440 tracking weak global cues that triggered a surge in retail jewellery demand across the country.
Gold prices have lost a whopping Rs 3,160 per 10 grams in the last three trading sessions. The precious metal is cheaper by 25 percent or Rs 6,535 per 10 gram, compared to November 27, 2012, level when the rates had touched the all-time high of Rs 32,975.
While Tuesday's fall of Rs 1,160 in Delhi bullion was the steepest among the four metros, in Mumbai it fell by Rs 650 to Rs 26,040, in Chennai by Rs 725 to 26,105 and in Kolkata by Rs 665 to Rs 26,945.
Traders attributed the fall in prices to particularly weak global cues.
In the global market, gold plunged 9.35 percent to USD 1,360.60 an ounce at the New York exchange. The metal has dropped by USD 200 an ounce, or nearly 13 percent, in the last two trading days.
Analysts and traders expect further fall in gold and silver prices in the coming days, which will lead to surge in domestic demand, especially jewellery items.
"Gold has lost quite a bit of sheen. Domestic prices have declined by 25 percent in the domestic market from its peak level. Prices are likely to stabilise at Rs 24,000-26,000 per ten gram," said Harish Gallipilli, Head of Commodities at brokerage firm Inditrade Derivatives and Commodities.
With fall in prices, jewellery demand has picked up in the ongoing marriage and festival season that will continue till next month, Bombay Bullion Association Ex-President Suresh Hundia said.
If the downward trend in global prices continues, he said the country's gold imports are expected to increase by 10 percent to 78 tonnes this month from the year-ago period.
Hundia also felt that domestic gold prices could come down to Rs 24,500 per ten gram and silver price to Rs 39,000 per kg by month-end.
Silver, too, plunged by Rs 1,875 to Rs 46,125 per kg in the national capital.
P C Jeweller Managing Director Balram Garg said sales have started picking up. "It is a good opportunity to buy when prices are in the range of Rs 25,000 and Rs 26,000 per ten gram," he added.
According to traders, a sharp fall in the global prices was due to worries over Chinese growth and possible sell-off by struggling Cyprus's central bank.
On the domestic front, gold of 99.9 and 99.5 percent purity fell by another Rs 1,160 each to Rs 26,440 and Rs 26,240 per 10 grams, respectively.
Sovereigns followed suit and lost Rs 900 to Rs 23,800 per piece of eight grams.
Similarly, silver ready remained under pressure and traded Rs 1,875 lower at Rs 46,125 per kg and weekly-based delivery by Rs 1,750 to Rs 44,150 per kg. The white metal had plunged Rs 4,600 in the previous two sessions.
However, silver coins held steady at Rs 74,000 for buying and Rs 75,000 for selling of 100 pieces.
First Published: Tuesday, April 16, 2013, 15:52