US Rate Hike Fears, Drop in Demand Take Sheen Off Gold

New Delhi: Gold cracked as much as Rs 730, its biggest one-day fall this year, to Rs 30,520 per 10 grams, in sync with a weak trend overseas on growing US rate hike buzz amid a fall in demand at the spot market.

Silver followed suit and dropped below the Rs 44,000 level by falling Rs 1,750 to Rs 43,250 per kg. Sentiment took a hit after gold fell below the $1,300 an ounce for the first time since June in the global market amid mounting concern that an improving US economy will prompt the Fed to raise rate soon, boosting the dollar and taking the sheen off the safe haven appeal of the metal, traders said.

Silver followed suit and dropped below the Rs 44,000 level by falling Rs 1,750 to Rs 43,250 per kg. Sentiment took a hit after gold fell below the $1,300 an ounce for the first time since June in the global market amid mounting concern that an improving US economy will prompt the Fed to raise rate soon, boosting the dollar and taking the sheen off the safe haven appeal of the metal.

Globally, gold dropped by 3.26 per cent to settle at $1,268.40 an ounce in New York Tuesday. Silver too retreated 5.38 per cent to $17.78 an ounce. In the national capital, gold of 99.9 per cent and 99.5 per cent purity tumbled by Rs 730 each to Rs 30,520 and Rs 30,370 per 10 grams, respectively.

This is the lowest closing since July 18. The precious metal had gained Rs 50 yesterday. Sovereign fell Rs 150 to Rs 24,350 per piece of eight grams. Tracking gold, silver recorded a steep fall of Rs 1,750 to Rs 43,250 per kg and weekly-based delivery by Rs 1,975 to Rs 43,060 per kg.

Silver coins plummeted by Rs 3,000 to Rs 74,000 for buying and Rs 75,000 for selling of 100 pieces.

Source: PTI