Gold price plunges by Rs 600; second biggest fall this year

Gold on Wednesday witnessed its second biggest loss this year of Rs 600 to Rs 27,300 per 10 grams due to reduced offtake amid weak global trend.

New Delhi: Gold prices in the National Capital Wednesday witnessed this year's second biggest fall of Rs 600 per ten grams to Rs 27,300, which is expected to trigger brisk retail purchase ahead of the wedding season.

Similarly, gold prices in Mumbai fell by Rs 270 to Rs 26,760, by Rs 415 to Rs 27,525 in Kolkata and by Rs 390 to Rs 27,090 per ten grams in Chennai.

The fall in gold prices is the second biggest since April 15 when the yellow metal plunged by Rs 1,160 to Rs 26,640 per ten grams in New Delhi.

Earlier in the day, PM's Economic Advisory Council Chairman C Rangarajan however said, "Gold prices are unlikely either to go up or go down substantially in the coming months.

Citing reasons for huge fall in domestic gold prices, brokerage firm SMC Comtrade Chairman and Managing Director D K Aggarwal said: "Gold as an investment asset is losing its sheen across the world. Big investors in India and other economies are shifting to equity markets for better returns."

In the London market, gold fell to a three-week low as dollar strengthened making bullion weak, he added.

In the domestic market, Aggarwal said that the lower prices will further encourage physical buying of gold vis-a-vis investment demand.

Tracking global cues, silver prices in the national capital fell by a massive Rs 800 to Rs 44,700 per kg on reduced offtake by jewellers and industrial units.

Gold imports into India, the world's largest consumer of the metal, stood at around 830 tonne in 2012-13 fiscal. It jumped by 138 percent to USD 7.5 billion last month, highest so far this year, pushing up the trade deficit to USD 17.7 billion and may worsen the CAD this fiscal.

The government has taken several steps, including raising import duty, to curb the inbound shipments of gold. RBI too has put restriction on banks to import gold.