Gold slumps to 10-month low, sheds Rs 500 on global weakness

Falling for the second day, gold cracked below the Rs 28,000-mark by plunging Rs 500 to over 10-month low of Rs 27,750 per 10 grams on Friday, tracking a weak global trend.

Moreover, reduced offtake by jewellers owing to negligible demand at the domestic spot market in view of the prevailing cash crunch following demonetisation of high-value notes hit sentiment.

Silver too dipped below the Rs 40,000-mark by tumbling Rs 1,350 to Rs 39,600 per kg on poor offtake by industrial units and coin makers.

Traders said sentiment was downbeat, largely in sync with a weak global trend where gold slipped to a 10-month low as the Federal Reserve indicated it will raise interest rates faster than previously expected, boosting the US dollar and eroded the demand for the precious metal as a safe-haven.

Globally, gold price fell 1.26% to $1,128.20 an ounce, and silver by 5.06% to $15.95 per ounce in New York on Thursday.

The government on November 8 had scrapped Rs 500 and Rs 1,000 notes to flush out black money, leading to a cash crunch in the market.

In the national capital, gold of 99.9% and 99.5% purity plunged Rs 500 each to Rs 27,750 and Rs 27,600 per 10 grams, respectively — a level last seen on February 6 when it had closed at Rs 27,700.

Sovereign, however, remained unaltered at Rs 24,000 per piece of eight grams.

Following gold, silver ready dropped by Rs 1,350 to Rs 39,600 per kg and weekly-based delivery by Rs 1,365 to Rs 39,610 per kg.

Silver coins too plummetted by Rs 1,000 to Rs 71,000 for buying and Rs 72,000 for selling of 100 pieces in scattered deals.