Bullion: Gold prices tumbled to close at two-week low of Rs 26,400 per ten gram at the bullion market during the week after the Reserve Bank eased curbs on import of the precious metal amid a weakening trend overseas as strengthening dollar eroded demand for the safe haven. Silver also slipped on poor offtake by industrial units.
Sentiment dampened after the Reserve Bank eased restrictions on gold imports by scrapping the controversial 80:20 scheme, which is likely to enhance supplies and check smuggling of the precious metal. Under the 80:20 norm, put in place in August 2013 to curb high gold inflows that was widening the current account deficit, at least 20 per cent of the imported gold had to be mandatorily exported before bringing in new lots. "The RBI move will improve supplies in the market and bring down gold prices further in coming days," All India Sarafa Association vice-president Surinder Kumar Jain said.
He said the import curbs had restricted availability of the basic raw material for the jewellery sector. Besides, a weak global trend where gold declined as a stronger dollar and falling crude prices, curbed demand for the precious metal, weighed on the gold prices. Gold in global market, which normally sets price trend on the domestic front, fell to USD 1,175.50, the biggest fall since November 5, in New York.
Silver too tumbled to USD 15.55 an ounce, the biggest drop since June 2013. In the national capital, gold of 99.9 and 99.5 per cent purity opened the week higher at Rs 26,930 and Rs 26,730 per ten gram respectively. Subsequently, met with resistance and fell to close at two-week low of Rs 26,400 and Rs 26,200 per ten gram, a level last seen on November 12. During the week, the precious metal prices have fallen by Rs 400 each.
Sovereign eased by Rs 100 to Rs 23,600 per piece of eight gram. Silver ready after moving both ways on alternate bouts of buying or selling, ended lower by Rs 1,170 to Rs 35,380 per kg and weekly-based delivery down by Rs 1,555 to Rs 34,525 per kg this week. On the other hand, silver coins rose by Rs 1,000 to Rs 61,000 buying and Rs 62,000 for selling of 100 pieces.
