Gold tanks below Rs 27K; Akshaya Tritiya fails to boost buying

Last Updated: Mon, May 13, 2013 13:45 hrs

Akshaya Tritiya, the biggest gold buying festival, failed to trigger any buying frenzy as the yellow metal plunged below the important Rs 27,000 per 10 gm level on the domestic bullion market on Monday.

The shiny metal came under frantic unwinding from stockists and speculators against the backdrop ongoing sell- off in global markets.

In contrast, silver gained modestly, attracting some retail demand amid good industrial off-take.

Standard gold of 99.5 per cent purity tanked by Rs 390 to conclude at Rs 26,985 per 10 gm from Friday's opening level of Rs 27,375.

Pure gold of 99.9 per cent purity slumped by Rs 370 to end at Rs 27,130 per 10 gm from Rs 27,500.

Silver ready (.999 fineness), however, rose by Rs 125 per kg to finish at Rs 45,915 compared to Friday's opening level of Rs 45,790.

Surprisingly, the recent drop in gold prices to multi-year lows failed to enthuse investors as sentiments took a beating on apprehension of further downside risk despite the ongoing wedding season, seen as a strong consumption period.

Most buyers are waiting on the sideline for more price correction after the auspicious occasion of Akshaya Tritiya, a bullion trader said.

Meanwhile, trading resumed today at the bullion hub here after a two-day strike in protest against the newly introduced local body tax (LBT) in Maharashtra.

Globally, gold plummeted to touch two-week lows on back of strong dollar valuations following a string of strong US macroeconomic data amid heightened speculation the Federal Reserve will wind down its USD 85 billion bond-buying plan.

In London, spot gold was trading low at USD 1,435.76 an ounce in early hours.

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