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Rediff News  All News  » Business » Gold plunges to seven-week low at Rs 11,550

Gold plunges to seven-week low at Rs 11,550

October 24, 2008 18:37 IST
Recording the steepest fall in the global markets, gold prices on Friday crashed to touch a seven week low level at Rs 11,550 per 10 gram on the bullion market in Mumbai as investors rushed to liquidate their holdings for raising funds to meet stock market losses.

The yellow metal dropped Rs 400 at Rs 11,550 per 10 gram, a level last seen on Sept 11, on brisk selling by stockists and investors after the Bombay Stock Exchange benchmark Sensex recorded a second steepest fall in its history.

The stock markets nosedived and bullion prices collapsed after the Reserve Bank of India kept interest rates unchanged and downgraded the national economic growth to 7.5 per cent.

Despite the reports of fall in the growth rate, there was hardly any buying in precious metals as safe hedge as investors forced to liquidate their holdings in commodities to pay losses suffered in stock markets, said Rakesh Anand, a Delhi-based
bullion merchant.

"Melting bullion markets suffer another blow as their prices in global markets records a biggest weekly fall in last 25 years," Anand said.

"Any financial market movements are being interpreted as bearish for precious metals," said a leading jeweller Suresh Verma.

Standard gold and ornaments dropped by Rs 400 each at Rs 11,550 and Rs 11,400 per 10 gram respectively while sovereign lost Rs 50 at Rs 10,400 per piece of eight gram.

The gold in last four days fell by Rs 1410 per 10 gram and silver by Rs 1,230 per kg in last two days.
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