Gold dips by Rs 445 per 10 gm to 4-yr low; world rate at 5-yr low
26 July 2015 4:47 AM IST
Gold prices took a fresh knock and slumped back to close below the psychological Rs 25,000-mark at the bullion hub here on aggressive stockists and speculative unwinding amid short selling. The overnight recovery proved to be short-lived as the metal once again turned to sell-off mode following <g data-gr-id="30">extreme</g> volatile overseas trend.
Gold succumbed to heavy selling pressure in <g data-gr-id="31">overseas</g> market after weaker-than-expected data from China and the <g data-gr-id="28">euro zone</g> raised concerns about global growth amid mounting fears over an imminent Fed rate hike. Standard gold (99.5 purity) plummeted by a whopping Rs 445 to finish at Rs 24,590 per 10 gm — its lowest level since 2011, compared to Thursday's close of Rs 25,035.
Pure gold (99.9 purity) also slumped by a similar margin to end at Rs 24,740 per 10 grams from Rs 25,185. The domestic sentiment has been hit hard in recent days by the sharp plunge in the prices of key commodities worldwide trade, a bullion trader commented.
Elsewhere, silver took a severe knock and tumbled sharply on frantic unwinding by savvy traders. Silver (.999 fineness) tanked by Rs 620 to conclude at Rs 34,215 per kg as against Rs 34,835 on Thursday.
In the international markets, the yellow metal on Friday extended a drop to a five-year low and headed for the longest run of weekly <g data-gr-id="27">loses</g> since 2012 as Macquarie Group said the metal has little appeal as a commodity or alternative to currencies.
Gold fell 0.7 <g data-gr-id="23">per cent</g> to USD 1,083.33 an ounce after reaching USD 1,077.40, the lowest since February 2010. Silver also lost 0.4 per cent to USD 14.60 an ounce after touching the lowest this <g data-gr-id="29">year,</g> and is also set for a fifth weekly loss.
Meanwhile, the 4.5 <g data-gr-id="26">per cent</g> slide this week would be the fifth straight drop and the most since October. Investors are dumping gold on expectations that the US Federal Reserve will soon raise interest rates amid a strengthening economy. Reports Thursday showed an index of leading American economic indicators rose more than forecast in June as jobless claims fell to a four-decade low.
Govt slashes gold import tariff value
The government on Friday slashed the import tariff value on gold for the second straight week to $354 per 10 gm in line with weak global prices of the precious metal. The import tariff value is the base price at which the customs duty is determined to prevent under-invoicing. Usually, the tariff value on gold and silver is revised on a fortnightly basis and the last revision was on July 16.
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