Mumbai: Gold maintained its losing streak for the fifth week in row at the domestic bullion market as continuous overseas bearishness loomed the domestic sentiment, coupled with tepid jewellery demand amid prevailing cash crunch after government's demonetisation announcement on November 8.
Absence of global fillip on expectation of US fed rate hike this month mainly pressured the metal, while fall in demand from jewellers and retailers in view of scarcity of funds, further weighed on gold prices.
Gold demand remained subdued despite a drop in prices, a trader said. Standard gold shed a whopping 8.84 per cent in its fifth week downslide, or Rs 2,625.00 per 10 grams. Yesterday, standard gold (99.5 purity) prices closed to Rs 28,035 per 10 grams, a level that has not been seen since March 28, 2016.
Elsewhere, silver rebounded sharply to close above the significant Rs 41,000 mark due to heavy speculative buying coupled with higher industrial demand. In worldwide trade, gold finished at its lowest levels since February, marking the fifth weekly loss in a row, as the dollar firmed, in anticipation of an interest rate hike at next week's Federal Reserve meeting.
Market-based indicators put the odds of a Fed rate hike next week at nearly 100 per cent. The move would be central bank's second post-crisis rate hike. The first occurred nearly a year ago, at the Fed's December 2015 policy meeting.
Higher interest rates typically cause the dollar to strengthen, which often weighs on commodities like gold which have prices denominated in dollars.
Gold for February delivery declined by USD 10.50, or 0.9 per cent, to settle at USD 1,161.90 an ounce. Prices marked their lowest finish since early February, and lost roughly 1.1 per cent for the week.
That was the longest stretch of consecutive weekly losses this year. In other trading, March silver ended at USD 16.967 an ounce, down 12.9 cents, or 0.8 per cent. Prices had a strong midweek advance, leaving them roughly 1.3 per cent higher for the week.
In the New York Comex trade, gold for delivery in February tanked to USD 1,161.90 an ounce as compared to last Friday's close at USD 1,177.80, while silver for March rose to USD 16.967 an ounce from USD 16.832.
On the domestic front, standard gold (99.5 purity) resumed higher at Rs 28,530 per 10 grams from last Friday's closing level of Rs 28,380 and later plunged to close at Rs 28,035, revealing a loss of Rs 345, or 1.22 per cent.
Pure gold (99.9 purity) also commenced higher at Rs 28,680 per 10 grams as compared to preceding weekend's level of Rs 28,530 and drifted to finish at Rs 28,185, showing a loss of Rs 345, or 1.21 per cent.
Silver ready (.999 fineness) opened higher at Rs 41,365 per kilogram from last Friday's closing level of Rs 40,790, it moved between Rs 41,815 and Rs 40,970 before finishing at Rs 41,565, registering a gain of Rs 775, or 1.90 per cent.
