Gold price falls to over two-month low of Rs 28,650 per 10 grams

New Delhi: Gold prices continued to feel the squeeze of growing bets for an interest rate hike by the US Fed as it slumped Rs 250 Wednesday to an over two-month low of Rs 28,650 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 Rs 500 to Rs 40,300 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 percent to USD 1,198.60 an ounce and silver by 0.65 percent to USD 16.84 in New York in yesterday.

In the national capital, gold of 99.9 percent and 99.5 percent purity declined by Rs 250 each to Rs 28,650 and Rs 28,500 per 10 grams, respectively. It had lost Rs 150 yesterday.

Sovereign, fell by Rs 200 to Rs 24,200 per piece of eight grams.

In line with gold, silver ready dropped by Rs 500 to Rs 40,300 per kg and the weekly-based delivery cracked below the Rs 40,000-mark by falling Rs 380 to Rs 39,970 per kg.

Silver coins too plummeted by Rs 1,000 to Rs 70,000 for buying and Rs 71,000 for selling of 100 pieces.