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BW Businessworld

[email protected] Low; Bargain Buying On

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Falling for the fourth straight session, gold prices fell to its lowest level in 20-month on Wednesday, 17 April 2013, by losing Rs 90 on sustained selling by stockist against restricted buying.

After dropping Rs 3,160 in last three sessions, gold fell further by Rs 90 to Rs 26,350 per ten grams, its lowest level since August 17, 2011.

Silver followed suit and surrendered Rs 425 to Rs 45,700 per kg on reduced offtake by industrial units and coin makers.

It had recorded a fall of Rs 6,475 in previous three sessions.

Both the precious metals remained in bear grip this week following a steep fall in prices in international markets on speculations of selling by struggling Cyprus central bank.

The dollar-denominated precious metals also fell on strengthening rupee against the US currency and government slashing tariff value of gold and silver, taking into account weak global trend.

On the domestic front, gold of 99.9 and 99.5 per cent purity fell further by Rs 90 each to Rs 26,350 and Rs 26,150 per ten grams.

However, sovereign found some low level buying and recovered by Rs 200 to Rs 24,000 per piece of eight gram.

In line with a general weak trend, silver ready declined further by Rs 425 to Rs 45,700 per kg and weekly-based delivery by Rs 690 to Rs 43,460 per kg.

Meanwhile, silver coins maintained steady trend at Rs 74,000 for buying and Rs 75,000 for selling of 100 pieces.

Gold Futures Near 19-month Low
Indian gold futures edged lower on Wednesday, near their lowest level in more than 19 months, on losses in the global markets and a stronger rupee, triggering bargain buying among physical traders.

The actively traded gold contract for June delivery on the Multi Commodity Exchange (MCX) was Rs 184 lower at Rs 25,582 per 10 grams at 4.54 p.m.

US gold for June delivery was 0.37 per cent lower at $1,382.2 an ounce. The rupee, which firmed in trade on Wednesday, plays an important role in determining the landed cost of the dollar-quoted yellow metal.

"There are many buyers after consolidation in prices ... sales will rise for Akshaya Tritiya," said S.K. Jain, vice-president of All India Sarafa Association.

India, the world's biggest buyer of the yellow metal, will celebrate Akshaya Tritiya, a key gold buying festival, next month. The wedding season has also begun and will continue till early June.

India has been trying to curb imports to put a lid on the record-high current account deficit. The federal government raised the import duty on gold, which it called a dead investment, by 50 per cent to 6 per cent in January.

On April 2, Finance Minister P. Chidambaram suggested the government was unlikely to raise the import tax on gold further to avoid gold smuggling.

May silver was Rs 592 lower at Rs 42,603 per kilogram.