Chinese offload falling gold, pull down price to 2-year-low
On the domestic front, the spot gold prices fell to an intra-day low of Rs 24,900 per 10 grams
By : DC Correspondent
Update: 2015-07-21 03:30 GMT
Mumbai: The prices of the yellow metal slumped sharply by Rs 400-Rs 500 per 10 grams in the domestic market on Monday while it plunged to a five-year low in the international markets amidst growing prospects about a hike in interest rate by the US Federal Reserve later this year.
The immediate trigger for a severe drop in the prices of gold, according to bullion experts, was a sharp sell-off in Chinese market, which dented investor sentiment.
According to industry experts, around five tonnes of gold was offloaded through the Shanghai Gold Exchange in the early morning trade, which dragged down the prices of gold to $1,088 per ounce in the global market.
On the domestic front, the spot gold prices fell to an intra-day low of Rs 24,900 per 10 grams. However, it recovered from its day’s lows and closed at Rs 25,400 per 10 grams.
Bullion experts said that the yellow metal is in a firm bearish grip as it has lost its appeal as a safe heaven asset and hence we could see further corrections in the coming days.
“Globally, the dollar has appreciated significantly against a basket of currencies due to the possibility of a rate hike in the US. The dollar index has risen 20 per cent. Global commodity prices are falling and political uncertainty with regards to Greece has subsided. Currently, there are no factors that could help gold prices to move higher from the current levels,” said Naveen Mathur, head of commodities at Angel Broking.