Time to buy gold, price at 6-month low

NEW DELHI: Gold extended its slump for the second day and shed another Rs 350 to hit a six-month low of Rs 29,000 per 10 grams in the bullion market on Thursday amid weakening global trend and considerable fall in demand from jewellers at the domestic spot market.

Silver went below the Rs 41,000-mark, tumbling by Rs 735 to Rs 40,700 per kg on reduced offtake by industrial units and coin makers.

Traders said sentiment was downbeat, largely in keeping with a weak global trend as the dollar surged to its highest in at least a decade against a basket of currencies on strong economic data and signs that the US Fed is inching towards increasing rates, eroded the metals' appeal as safe-haven assets.

Globally, gold fell 1.25 per cent to $1,173 an ounce in New York yesterday. Silver too dropped by 0.81 per cent to $16.48 an ounce.

A falling demand from jewellers and retailers in the domestic bullion market due to paucity of funds too weighed on sentiments, traders said.

The government on November 8 had scrapped 500 and Rs 1,000 rupee notes to crack down on black money, leading to a cash crunch.

"Buying activity remained at a low ebb even at prevailing levels", said Rakesh Anand, a Delhi-based jeweller.

In the national capital, gold of 99.9 per cent and 99.5 per cent purity slumped by Rs 350 each to Rs 29,000 and Rs 28,850 per 10 grams, respectively -- a level last seen on June 1. The precious metal had lost Rs 100 in yesterday's trade.Sovereign traded lower by Rs 50 at Rs 24,350 per piece of eight grams

On the other hand, silver coins, held steady at Rs 74,000 for buying and Rs 75,000 for selling of 100 pieces in scattered deals.