New Delhi, May 20 (IANS) Gold hit a 21-month low and silver prices plunged to a two-and-a-half-year level Monday. Experts said this happened because of the strengthening of the dollar.
According to MCX data, gold price plummetted to Rs.25,574 per 10 grams (down Rs.261.00) and silver dipped to Rs.41,459 per 1 kilogram (down Rs.1,170).
"This slow and steady downfall of gold price is mainly due to strengthening of the dollar against the rupee. Euro is also doing better and Spain has clocked positive balance of payment," Pankaj Parekh, vice chairman, Gems & Jewellery Export Promotion Council, told IANS.
He emphasised that the economic situation globally is improving and stock exchanges across the world are bullish.
Gold touched Rs.25,766 per 10 gms in April 17 from a peak of Rs.32,464 per 10 gram struck in November last year.
"A month back gold prices dipped to similar level and from there it bounced back to Rs.27,500 per 10 grams level a fortnight back. The prices are dipping and recouping back. It has remained range-bound between Rs.26,000 and Rs.27,500 per 10 grams in the last one month," Rahul Gupta, director, PP Jewellers said.
He mentioned that gold prices have corrected a lot and going forward it will see an upward movement only.
The rupee also opened lower by 16 paise at Rs.55.04 per dollar against Friday's closing of Rs.54.88.
Traders said the rupee weakened because of heavy demand for the US currency from gold and oil importers along with volatile domestic shares.