Gold plunges to nearly 3-week low of Rs 29,100 amid slump in demand

Gold prices tumbled by Rs 70 to trade at a nearly three-week low of Rs 29,100 per 10 gram at the bullion market on Monday amid a weak trend overseas and slump in demand from local jewellers.

Silver also eased by Rs 100 to Rs 38,700 per kg backed by reduced offtake by industrial units and coin makers.

Traders said apart from a weak trend overseas in the wake of signals from the Federal Reserve for another hike in interest rates this year, eroding demand for the precious metal as a safe haven, fall in demand from local jewellers and retailers, mainly weighed on gold prices.

Globally, gold fell 0.33 per cent to $1,249.30 an ounce and silver by 0.51 per cent to $16.60 an ounce in Singapore.

In the national capital, gold of 99.9 and 99.5 per cent purity slipped by Rs 70 each to Rs 29,100 and Rs 28,950 per 10 gram respectively, a level last seen on May 31. It had gained Rs 55 in Saturday's trade.

Sovereign, however, remained unaltered at Rs 24,400 per piece of eight gram.

Following gold, silver ready fell by Rs 100 to Rs 38,700 per kg and weekly-based delivery by Rs 120 to Rs 38,360 per kg.

Silver coins too plunged by Rs 1,000 to Rs 71,000 for buying and Rs 72,000 for selling of 100 pieces.