Gold falls Rs 300

New Delhi: Gold on Friday plunged by Rs 300 per 10 gram, snapping its two-day rally, in the national capital on frantic selling sparked by a steep fall in prices overseas on concerns over Dubai debt crisis.

The precious metal, which usually maintains a steady run throughout the day, witnessed an unusual volatility with the precious metal plunging to Rs 17,600 in intra-day trade
before ending at Rs 17,850 per ten gram with a hefty loss of Rs 320.

A similar weakness was seen in silver ready that tumbled by Rs 950 to Rs 28,000 per kg.

Marketmen said selling pressure gathered momentum after gold in London dropped the most since January as dollar's gain checked demand for the precious metal as an alternative asset.

"There is no physical buying in the market and the prices are solely moving in tandem with the global trend, which depends on the US currency movements," said All India
Sarafa (Bullion) Bazar president, Mr Sheel Chand Jain.

He said it was the Dubai debt news impacting financial markets, which has turned jittery since the global economic slowdown a year ago.

The gold dropped by $50.28 in London to $1,138.10 an ounce, the biggest intra-day slide since January 12. The US dollar rebounded from a 15-month low after Dubai's efforts to reschedule its debt rattled investors, they said.

A fall in demand at existing higher levels also influenced trading to some extent. On Thursday, the gold prices in Delhi surged to a peak level of Rs 18,170 per 10 gram.