Gold prices worldwide have slumped for the sixth consecutive session, sliding into a five year low as data showed China's gold reserves lower than what the market expected. The metal is down more than 40 per cent from its 2011 figures.
International gold prices fell to $ 1,088.50 per troy ounce which somewhat steadied to $ 1,109.75 ounce, later. Taking the cue, India's MCX gold touched a low of Rs 24,904 per 10 gm for the August contract, down 2.3%, the lowest since having hit Rs 24,830 on June 28, 2013. It however, did bounce back to Rs 25,113 per 10 gm.
“The price drop will not trigger a rise in imports as banks and the trade have huge stocks of gold with them,” said Manish Jain, chairman, Gems & Jewellery Trade Federation.
“Investors are not keen to participate in the gold market as the precious metal has given negative returns in the last two years. They are investing in equity and other financial instruments where they are getting good returns. Those who have weddings in the family in the November-December may buy some jewellery right now,” said Bachhraj Bamalwa, director, Nemichand Bamalwa & Sons. However, leading jewellers and a banker sounded optimistic amid the fall.
International gold prices are down 6.12% year-to-date, while Indian gold prices are down 6.2% in the same period. US Federal Reserve chair Janet Yellen reaffirmed that US interest rates were likely to rise later in 2015, and, data pointed to a strong pick up in US consumer prices and housing starts, adding to the confidence regarding growth in the United States.
