Bullion merchants said apart from subdued demand from jewellers and retailers despite ongoing festive season, a weakening global trend where gold eased to over one-week low as investors weighed the health of the global economy against tension between Ukraine and Russia, mainly weighed on precious metal prices.
Exports increased by 10.6 per cent in the first quarter of 2014-15 to $81.7 billion. Imports moderated by 6.5 per cent to $116.4 billion. The CAD, which is the difference between the inflow and outflow of foreign currency, had touched a record high of $ 87.8 billion (4.8 per cent) in 2012-13 fiscal mainly on account of steep increase in gold imports.
Continued its slide for the sixth straight day, gold prices plunged by Rs 220 to trade at three-week low of Rs 28,280 per 10 grams in New Delhi on Thursday on increased selling by stockists amid a weakening global trend.
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Earlier, similar restrictions were imposed on commercial banks.
After gaining Rs 75 in the previous session, the precious metal advanced further, driven by a firming trend in overseas markets as US economic data signalled the Federal Reserve may continue its asset purchase program to support the recovery.
The Modi government's decision to demonetise Rs 500 and Rs 1,000 banknotes will drive up interest in the bullion market
While the surcharge on super-rich would help garner additional income of around Rs 12,000 crore this fiscal on the direct tax side.
To check rising current account deficit, the government has raised import duties and the Reserve Bank of India had imposed curbs on import of the yellow metal and also laid down various pre-conditions for inward shipments of the precious metal.
Silver also plunged by Rs 1,430 per kg on poor offtake by industrial units and coin makers.
Traders said weak demand at prevailing higher levels and retailers looking for more correction mainly kept pressure on gold and silver prices.
Traders said increased buying of gold by stockists and jewellers to meet the rising festive and marriage season demand, amid firming global trend, influenced the sentiment.
Spot gold was bid lower at $ 1,298 an ounce in early European trade.
A higher opening in the domestic equity market also supported the rupee but dollar's gain against other currencies overseas limited the rise of domestic unit, forex dealers said.
Gold plunged by Rs 120 to Rs 30,810 per ten gram, while silver lost Rs 280 to Rs 49,670 per kg on falling demand among industrial units and coin makers.
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Traders said buying activity continued for the third straight day for the ongoing 'Navratras,' an auspicous week in Hindu mythology for making new purchases and marriage season.
Traders said sustained buying by stockists to meet the rising demand for the 'Navratras,' an auspicious week in Hindu mythology for making fresh purchases mainly pushed up the prices of the precious metals.
Traders said sustained selling by stockists on the back of sluggish demand mainly kept pressure on both gold and silver prices for the second straight day.
Gold prices regained Rs 32,000 per ten gram level after nine months in the national capital on Tuesday on increased stockists buying as rupee plunged to historic low of 66-level.
Traders said besides sustained selling by stockists against subdued demand, strengthening rupee led to persistent fall in prices.
In order to contain current account deficit, the Reserve Bank last month imposed restrictions on gold imports by banks and other authorised agencies.
Traders said besides reduced offtake by stockists and jewellers in view of off-marriage season, weak trend in global markets mainly led to the fall in gold and silver prices.
Gold tumbled by Rs 310 to Rs 30,290 per ten grams in the national capital today on heavy sell-off by stockists and a weak global trend.
Silver prices also jumped by Rs 500 to Rs 45,000 per kg on increased offtake by jewellery fabricators and industrial units.
At the domestic front, gold of 99.9 and 99.5 per cent purity declined by Rs 20 each to Rs 30,180 and Rs 29,980 per ten grams, respectively.
Traders said sustained selling by stockists against falling demand at prevailing higher levels mainly led to decline for the second day in the precious metals.
Traders said sustained selling by stockists against sluggish demand amid a weakening global trend, where gold dropped below $1,200 an ounce as the Federal Reserve scaled back monetary stimulus, mainly kept pressure on precious metals.
Gold is up 0.8 per cent for the week, after hitting a near-two-week high earlier in the week.
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.
The government on Monday reduced import tariff value on gold to $388 per 10 grams and on silver to $540 per kg, following global price trends.
The GST will be a national sales tax that will be levied on consumption of goods or use of services
The government on Thursday slashed the import tariff value on gold for the second straight day to $ 414 per 10 grams and silver to $672 per kg, in line with weak global prices of the precious metals.
Most consumers are going for token buying of lesser value and are waiting for price correction for purchase of wedding jewellery.
Both banks and jewelers sell coins and bars, but it is generally costlier to buy it from a bank
Silver also turned weak and dropped by Rs 350 to Rs 41,200 per kg on reduced offtake by industrial units and coin makers.
Official sources say that the finance ministry is aware of the possible spike in smuggling activity and has already asked intelligence agencies to tighten their vigilance and come down on the unofficial entry of gold into India.
While gold zoomed up by Rs 410 to Rs 30,810 per ten gram, silver jumped up by Rs 990 to Rs 51,200 per kg on increased offtake by stockists on the back of firm global trend.
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Silver advanced by Rs 150 to Rs 34,200 per kg on increased offtake.
Silver also dropped for the fifth straight day and declined further by Rs 375 to Rs 39,250 per kg on reduced offtake by industrial units and coin makers.
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