Mumbai, India (4E) – Gold prices in India fell to its lowest level in six months on Saturday to 30,390 rupees per 10 grams as weak demand and waning global trend prompt strong selloff by stockists.
Demand for the precious metals fell with the end of the marriage and festive season that traditionally drive buying activity, according to bullion merchants.
Price of standard gold with 99.5 per cent purity plunged by 200 rupees per 10 grams to close at 29,890 rupees compared to Friday’s closing price of 30,090 rupees.
Pure gold having 99.9 per cent purity tanked by 195 rupees for every 10 grams to close at 30,030 rupees from 30,225 rupees.
Speculative selling in the market also saw silver drop below the crucial 57,000 rupees per kilogram level.
Analysts blamed the dip to a weak trend in the overseas markets after Federal Reserve Chairman Ben Bernanke reported that the U.S. economy is steadily improving, thereby reducing demand for metals as investment options. Gold fell below $1,600 an ounce in U.S. trading.
The Reserve Bank of India’s policies to control the rising current account deficit have also contributed to the sluggishness of gold prices. Other reasons seen that hurt the precious metal include the rupee’s weakness against the U.S. dollar, strong performance of domestic stocks and global uncertainty for gold prices.