Gold declines by Rs 130 on sluggish demand

Gold prices tumbled by Rs 130 to Rs 29,340 per 10 grams in the bullion market here Friday due to slackened demand at prevailing higher levels amid a weakening global trend.

Silver held steady at Rs 53,900 per kg in restricted buying by industrial units and coin makers.

Traders said sentiment in gold remained bearish after it fell in global markets as manufacturing in China trailed estimates and concern over deepening eurozone debt crisis boosted dollar, reducing demand for the precious metal as an alternative investment.

In Singapore, gold declined by 0.6 per cent to $1,551.65 an ounce and silver also shed 0.6 per cent to $ 27.54 an ounce.

Sluggish domestic demand at prevailing higher levels also dampened the sentiment, they added.

On the domestic front, gold of 99.9 and 99.5 per cent purity fell by Rs 130 each to Rs 29,340 and Rs 29,200 per 10 grams. It had lost Rs 180 yesterday.

Sovereign held steady at Rs 23,850 per piece of eight grams.

Silver ready prices remained flat at Rs 53,900 per kg, while weekly-based delivery declined by Rs 210 to Rs 53,630 per kg on lack of support.

Meanwhile, silver coins continued to be asked at previous level of Rs 64,000 for buying and Rs 65,000 for selling of 100 pieces.