Gold prices suffered the steepest fall in a week on Thursday falling by Rs. 1,250 to Rs. 30,950 per ten grams on heavy sell-off by stockists as equity markets and rupee recovered after fresh measures by the Reserve Bank of India (RBI).
The price of silver plunged by Rs. 1,800 to Rs. 53,700 per kg due to poor offtake by industrial units and weakening trend in overseas markets. Silver coins also fell by Rs. 1,000 to Rs. 88,000 for buying and Rs. 89,000 for selling of 100 pieces.
Traders said the precious metals fell sharply following fast recovery in rupee against the dollar after the new RBI Chief Raghuram Rajan announced measures to boost economic growth.
The rupee was trading higher by 84 paise at Rs. 66.24 per dollar, while stock markets were up by over 2 per cent, denting the appeal of gold, considered as safe haven for investors during economic turbulences.
Traders said a weakening trend in overseas markets on expectations for reduced stimulus in the US and limited military strikes against Syria, further influenced sentiment.
Gold in Singapore, which normally sets the price trend on the domestic front, fell 0.7 per cent to $1,381.35 an ounce and silver by 0.9 per cent to $23.27 an ounce.
On the domestic front, gold of 99.9 and 99.5 per cent purity suffered Rs. 1250 loss each to quote at Rs. 30,950 and Rs. 30,750 per ten grams respectively. It had gained Rs. 1,100 in the last two sessions.
Sovereign declined by Rs. 200 to Rs. 25,100 per piece of eight gram.