Gold prices crash by Rs 1,160, experts advise caution

Mangalore Today/ITV

New Delhi, April 16: Gold prices continued to crash by  Rs 1,160 to Rs 26,440 in Indian bullion markets, with experts advising consumers to be careful while buying gold at cheaper prices in a hurry.
In line with overall trends, silver also plunged by Rs 1,875 to Rs 46,125 per kg.

Marketmen said sustained weakness in overseas markets, where gold plunged over 9 per cent yesterday to its lowest level since February 2011, on worries over Chinese growth and possible sell-off by struggling Cyprus’s central bank, continued to influence the trading sentiment here.

 

In Asian markets, the price of gold for June delivery lost $ 11.50 or 0.8 per cent to $ 1,349.90 an ounce.  On Monday, gold futures prices plunged $ 140.30 or 9.3 per cent to $1,361/10 an ounce on the Comex division of New York Mercantile Exchange.

This is the biggest one-day percent drop since February, 1983, experts say.

Meanwhile the CME Group Inc, which controls the metals and energy exchanges in the US, has raised collateral requirements  by 19 per cent for trading in benchmark gold, and by 18 per cent for silver futures contracts. The increase will be effective from close of business Tuesday.

Jewellers in India apprehend that the prices of gold may further fall in the coming days.

While it is tempting for common customers to buy gold ornaments at cheaper prices from showrooms, experts advise that the prices may further fall leading to losses in the short term.

Gold purchases in India during Navratra, considering auspicious, are on the rise as reports pour in of steep drop in prices of the yellow metal.