Gold and silver decline on global cues

The yellow metal in London declined by over 2% to trade at $1,177.6 an oz in spot trade on Friday

Gold declined by a little over one per cent in futures trade on the Multi Commodity Exchange (MCX) on Friday, after heavy selling in global markets.

Gold for near-month delivery was traded at Rs 26,217 per 10g in early evening trade, against Thursday’s close of Rs 26,534 per 10g.

The yellow metal in London declined by a little over two per cent to trade at $1,177.6 an oz in spot trade on Friday.

There was large-scale pullout by wary investors, seeking refuge in investment avenues like stocks, assuming bullish prospects for equity markets would continue in emerging markets like India.

Ajay Kedia, managing director of Kedia Commodity, a city-based broking firm, said: “lnvestment in bullion loses appeal after reports of fewer new jobs added in February. In February private players added 212,000 jobs in February, compared to 250,000 in January. Delay in the announcement of quantitative easing in the European Union also threatened bullion's appeal as a profitable investment option.”

An analyst said: “Investment in equities look more attractive in terms of returns. Therefore, investors sold their holding in gold to divert funds into equities in markets like India.”

Similarly, the price of silver fell a little less than two per cent to trade at Rs 36,027 a kg in early evening trade on the MCX for near-month delivery. It had closed on Thursday at Rs 36,610 a kg.

Silver fell about two per cent to trade at $15.86 an oz in early London trade, against the previous close at $16.24 an oz.

In a surprise move, copper on the London Metal Exchange followed the move of bullion and declined nearly 1.5 per cent to trade at $5,782 a tonne against the previous close of $5,861 a tonne.