Millennium Post

Gold dips by Rs550 to Rs26,210; silver sinks to 27-month low

Against the backdrop of extreme global volatility, gold prices plunged further in the domestic bullion market on Thursday due to frantic selling from stockists and traders amid subdued investment demand. Silver too crashed and fell below the benchmark Rs 44,000 per kg mark to close at a 27-month low on the back of heavy sell-off from speculators.

Standard gold of 99.5 per cent purity slumped by Rs 550 to end at Rs 26,210 per 10 gm from Wednesday’s close of Rs 26,760. Pure gold of 99.9 per cent purity too plunged by a similar margin to end at Rs 26,350 per 10 gm from Rs 26,900.  Silver ready (.999 fineness) tanked by a hefty Rs 1,065 to finish at Rs 43,630 per kg against the overnight closing level of Rs 44,695.
Gold in Singapore, which normally sets the price trend in India, dropped by 0.4 per cent to $1,387.30 an ounce, the cheapest since 19 April.

In Delhi, gold of 99.9 and 99.5 per cent purity plunged further by Rs 500 each to Rs 26,800 and Rs 26,600 per 10 grams, respectively. Sovereigns too dropped by Rs 300 to Rs 23,700 per piece of eight grams.

Silver ready in Delhi dropped by Rs 1,000 to Rs 43,700 per kg and weekly-based delivery by Rs 940 to Rs 43,940 per kg. Silver coins too tumbled by Rs 1,000 to 74,000 for buying and Rs 75,000 for selling of 100 pieces.

In the London markets, the yellow metal dropped to the lowest in a month as filings showed that George Soros and Blackrock cut holdings of bullion-backed exchange-traded products, adding to signs that investment demand is waning as US equities rally to records.

Gold slid 1.6 per cent to $1,370.82 an ounce, the lowest price since 18 April. Prices fell for a sixth day in the worst run since February. Silver dropped 1.8 per cent to $22.20 an ounce, retreating for a fourth day.

Soros Fund Management lowered its investment in the SPDR Gold Trust, the biggest gold-backed ETP, in the three months to March 31, a filing showed. The dollar-priced gold has dropped 18 per cent this year, tumbling into a bear market last month, as some investors lost faith in the metal as a store of value. The dollar has rallied 5.2 per cent while the Standard and Poors 500 Index reached a record.

Holdings in the SPDR Gold Trust fell to 1,047.13 metric tonnes, the least since March 2009. They have shrunk 303.7 tonnes this year. Soros Fund Management lowered its investment 12 per cent to 530,900 shares as on March 31, the filing showed. That followed a 55 per cent cut in the fourth quarter of last year.

Paulson, the largest investor in SPDR, maintained its stake while funds run by Northern Trust and Blackrock showed reductions. Schroder Investment Management Group and Farallon Capital Management bought shares. Total holdings in bullion ETPs are down 16 per cent this year.

Gold demand sank 13 per cent to 963 metric tonnes in the first quarter as ETP sales outweighed buying from China and India, the World Gold Council said.
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