Traders said sentiment turned bearish on emergence of stockists selling at existing higher levels amid weak global trend as improving economic growth reduced demand for the precious metals as an alternate investment.
Gold prices surged Rs 175 to a record high of Rs 8,150 per ten gram on the bullion market on Monday on sustained buying by stockists induced by a unprecedented rise in its prices in overseas markets.
Silver also spurted by Rs 1,000 to Rs 37,500 per kg.
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Traders said continued selling by stockists in tandem with a weakening global trend, on speculation that the US Fed may begin scaling back monetary stimulus as the economy improves, mainly kept pressure on prices.
Gold discounts in India, the world's second-biggest consumer, widened this week as dealers struggled to offload stocks amid sluggish demand.
The overall gold demand during the second quarter of 2013 stood at 1,148 tonnes, the World Gold Council Q2 Demand Trends report said.
Bombay Bullion Association to develop a software for the same.
Sentiment remained bearish as gold fell in global markets after better-than-expected US economic data backed the case for the Federal Reserve to slow stimulus, traders said.
After losing Rs 730 in last six sessions after the Reserve Bank of India eased imports curbs by scrapping 80:20 scheme, gold staged a strong comeback by rising Rs 840 to close at Rs 27,040 per ten grams, a level last seen on October 30.
Gold slipped to near 5-1/2-year lows on Friday and was on course for a sixth straight weekly fall.
Traders said profit-selling by stockists at prevailing higher levels amid a weak global trend mainly pulled down both gold and silver prices.
On the domestic front, gold of 99.9 and 99.5 per cent purity surged by Rs 625 each to Rs 31,750 and Rs 31,550 per ten gram, respectively. Sovereign followed suit and rose by Rs 200 to Rs 25,100 per piece of eight gram.
Gold for delivery in far-month February contract surged to Rs 16,785 per 10 grams before slipping 0.58 per cent to Rs 16,774 per 10 gram in a turnover of 164 lots.
However, silver snapped two-day rising trend and declined by Rs 215 to Rs 49,100 per kg on reduced offtake at prevailing higher levels.
Traders said buying activity in gold picked as stockists enlarged their positions for the rising wedding season demand.
Silver also fell by Rs 400 to Rs 41,000 per kg on poor offtake by industrial units and coin makers.
In what is being described as the 'biggest ever seizure of cash' by an enforcement agency, unaccounted cash -- one report said more than Rs 177 crore (Rs 1.77 billion), another said Rs 257 crores (Rs 2.57 billion), a third said Rs 194.45 crores (Rs 1.94 billion) -- was unearthed from perfume trader Piyush Jain's home in Kanpur.
Consumer sentiment seen better than last year's
Gold surged Rs 400 to Rs 28,940 per 10 grams on Tuesday on brisk buying by stockists and jewelers for the ongoing marriage season amid a firming global trend.
Sentiment remained bearish as gold fell in global markets after the US and Russia agreed on a plan to destroy Syria's chemical weapons, diminishing demand for the precious metal, traders said.
Traders said sustained buying by stockists and retailers for the ongoing marriage season mainly led an upward trend in precious metals.
Traders said the sentiment remained bearish on stockists selling and weakening global trend as Federal Reserve signalled a rise in interest rates while further reducing monetary stimulus, boosting the dollar and curbing demand for the metal.
Sentiment turned bearish after gold fell in overseas markets to a lowest level in three-week on speculation that the Federal Reserve will start to reduce bond purchases by the end of the year as the US economy improves, traders said. Gold in Singapore, which normally set price trend on the domestic front, fell by 0.8 per cent to 1,273.55 dollar an ounce, the lowest since July 17 and silver by 0.8 per cent to 19.37 dollar an ounce.
Gold schemes are offering attractive returns to investors.
On the domestic front, gold of 99.9 and 99.5 per cent purity fell by Rs 30 each to Rs 28,445 and Rs 28,245 per 10 grams, respectively after gaining Rs 655 in last three days. Sovereigns, however, remained stable at Rs 24,400 per piece of eight grams in restricted buying activity.
Gold prices plunged by Rs 410 to trade at over two-week low of Rs 27,790 per 10 grams at the bullion market on Monday.
Silver also turned weak and declined by Rs 400 to Rs 42,600 per kg on poor offtake by industrial units and coin makers.
Bullion traders said a weakening trend in global markets, as the dollar's strength eroded demand, mainly put pressure on the precious metal.
Sentiments remained bearish as gold and silver tumbled to the lowest since June in global markets as US manufacturing in August expanded at the fastest pace in three years, bolstering prospects for the economy and dampening demand for the metal, traders said.
The yellow metal had shed Rs 20 on Tuesday.
The commerce ministry has called a meeting on Monday to discuss tighter norms amid reports of increased round-tripping of gold
Gold demand in rural India is expected to be lower this year with weak monsoon affecting household savings, according to the World Gold Council (WGC).
Gold in Singapore, which normally sets price trend on the domestic front, dropped by 0.4 per cent to $1,283.28 an ounce after data showed that US employers added more jobs than expected which reduced demand for the metal as an alternate investment.
The white metal had hit a record level of Rs 74,300 on April 25.
Traders said reduced offtake by retailers and stockists at prevailing higher levels mainly kept pressure on gold and silver prices.
Chidambaram said banks have been asked to strictly adhere to the norms on gold imports.
Gold slips by Rs 150 on low demand.
Most jewellery shops and establishments in the country are shut since March 2.
Traders said increased buying by stockists and retailers for the ongoing marriage season amid a firming global trend, as escalating tensions between Ukraine and Russia spur demand for haven assets, mainly led the rise in precious metal prices.
Silver also gained for the third-day and jumped by Rs 500 to Rs 43,000 per kg on increased offtake by industrial units and coin makers.
