Precious metals tumble on global cues

Precious metals tumbled in Zaveri Bazar here on Monday, due to massive profit booking by stockists. Reduced offtake at the current high levels prompted retail jewellers to wait and watch for possible correction before placing orders for the new season.

As a result, standard gold fell nearly two per cent, or Rs 550, to close the day at Rs 27,115 per 10 gram from Rs 27,665 per 10 gram on Saturday. In Delhi, too, the yellow metal plunged by Rs 600 to sell at Rs 27,490 per 10 grams.

Following suit, silver fell over two per cent, or Rs 1,340, in Mumbai to close at Rs 63,100 a kg in physical market on Monday, against Rs 64,440 a kg on Saturday. In Delhi, silver closed Rs 1,800 down at Rs 62,800 per kg.

The movement in the prices of precious metals followed global moves. Gold for immediate delivery in London fell 0.5 per cent in early trade following the market-friendly statement made by US Federal Reserve Chairman Ben S Bernanke. He said growth would resume, boosting speculation that the central bank might not add extra stimulus, eroding the appeal of investments that could act as protection of wealth.

The yellow metal fell to trade at $1,819.35 an ounce in London, after dropping by as much as 1.2 per cent earlier. The metal has slumped 11 per cent from its all-time high of $1,913.50 on August 23, finding renewed corelation with the rebound in equities.

Part of this fall can be attributed to the declining rupee, which fell to 46.05 against the dollar on Monday from 46.16 on Friday.