Zee Media Bureau
New Delhi: Gold prices hit their lowest in nearly three years on Wednesday as strong US economic data boosted stocks and supported the Federal Reserve's plan to scale back its bond purchases in the next few months.
Spot gold tanked to its lowest since September 2010 at USD 1,229.80 an ounce and last traded down USD 42.40 or 3.32 percent at USD 1,236.20 an ounce.
At domestic level, gold prices dipped below Rs 26,000-level by falling Rs 728 to Rs 25,831 per 10 grams in futures trade today as speculators offloaded their positions, tracking a weak global trend.
At the Multi Commodity Exchange (MCX), gold for delivery in August fell by Rs 728 to Rs 25,831 per ten grams as against its previous close of Rs 26,559 .
Similarly, silver for delivery in July moved lower by Rs 1,686 to Rs 38,977 per kg.
Market analysts attributed the fall in gold futures to offloading of positions by speculators on the back of weak global trend where the yellow metal hit its near 3-year low.
They said the metal declined in global markets as investors weighed the prospect of reduced monetary stimulus by the US Federal Reserve and slower growth in China.
Gold price in overseas markets, which normally set price trend on the domestic front, hit a near-three year low today, falling for a seventh session out of eight, as investors liquidated precious metals after well-received US data fuelled fears the Federal Reserve would rein in its ultra-loose monetary policy.
Bullion prices have been sliding since Fed Chairman Ben Bernanke laid out a strategy last Wednesday to wind down the bank's USD 85 billion monthly bond purchases on the back of a recovering economy.
Gold's losses since the beginning of last week through Tuesday amount to 8 percent, or about USD 113 per ounce.
Silver fell over 2 percent to its lowest since August 2010.
In New York, gold for August delivery dropped USD 2 or 0.1 percent to settle at USD 1,275.10 an ounce on the Comex division of the NYMEX yesterday.
With Agency Inputs
First Published: Wednesday, June 26, 2013, 14:33