Gold drops Rs 400, silver plunges by Rs 1,350 on global cues

Gold hits one-week low abroad after minutes of Federal Reserve's last meeting show some policymakers favour interest rate hike in June

Gold prices tumbled by Rs 400 to hit one-week low of Rs 26,750 per 10 grams at the bullion market today amid a weak global trend and low demand from jewellers and retailers.

Silver also plunged by Rs 1,350 at Rs 36,650 per kg on poor offtake by industrial users and coin makers.

Bullion merchants said apart from sluggish demand from jewellers and retailers, a weakening global trend where gold declined to over one-week low after minutes of the Federal Reserve's last meeting showed that some policymakers favoured raising interest rates in June, mainly dampened the sentiments here.

Gold prices in Singapore, which normally determines trends on the domestic front, fell by 0.8 per cent to $1,192.74 an ounce, the lowest since April 1 and silver dropped 1.8 per cent to $16.23 an ounce, the lowest since March 20.

In the national capital, gold of 99.9 per cent purity suffered a sharp set-back of Rs 400 each at Rs 26,750 and Rs 26,600 per 10 grams, respectively, a level last seen on April 1. The precious metal has lost Rs 100 in the past two days.

Sovereign, however, held steady at Rs 23,700 per piece of eight grams.

Tracking gold, silver ready also dropped by Rs 1,350 at Rs 36,650 per kg and weekly-based delivery by Rs 1,270 at Rs 36,450 per kg.

Silver coins also nosedived by Rs 2,000 at Rs 55,000 for buying and Rs 56,000 for selling of 100 pieces.