Gold prices fall sharply

Gold price on the Multi Commodity Exchange, too, fell by 1.4% to Rs 28,441 for 10 grams

Gold prices in the international market have dropped with concerns over the US debt ceiling easing after the Republicans said they would move to raise the government's debt ceiling temporarily. This created optimism in the market, causing investors to liquidate their investment in gold.

On Friday, gold was trading at $1,268.24 per ounce on the London spot market, down 1.5 per cent. Gold price on the Multi Commodity Exchange, too, fell by 1.4 per cent to Rs 28,441 for 10 grams. However, on the Mumbai spot markets, the precious metal closed above Rs 30,145 for 10 g. SPDR Gold Trust, a gold-backed ETF, saw outflows of nearly eight tonnes since October 1.

Gold demand from India is likely to jump as much as 15 per cent to 300 tonnes in the December quarter from a year earlier.

China's net gold purchases from Hong Kong fell five per cent in August from the previous month, but were still healthy at 110.5 tonnes.

"Bullion outlooks remain bearish for gold as market is trading below the psychological $1,300-level. On MCX, support is seen near Rs 28,000 per 10 grams ahead of key festival season demand," said Ajay Kedia, MD of Kedia Commodities.

Silver was also down by 0.4 per cent to $21.26 per ounce. On MCX, silver has seen a fall of 2.43 per cent to Rs 47,090 a kg.

NYMEX crude oil was down by 1.57 per cent to $101.42 per barrel. Brent crude was also down by 0.8 per cent to $110.75 per barrel. On MCX, crude oil was trading at Rs 6218 per barrel , down 1.8 per cent.