Continuing its losing momentum into the third trading session, gold on Tuesday plunged R650 per 10 gram to close at R26,040 on the back of negative trends in global markets where the yellow metal dropped to an over two-year low.
“Gold is taking cues from international markets where its prices are under pressure,” said Nitin Nachnani, research analyst, Geojit Comtrade.
“On the MCX front, we expect prices to correct up to levels of R25,800 and R25,000. So, even after a correction of almost 20% from gold’s lifetime high of R32,464 (on November 25, 2012), our advice to investors will still be to wait before taking up any long position,” he added.
In overseas markets, gold plunged more than 9% on Monday to its lowest level since February 2011, on worries over Chinese growth and possible sell-off by Cyprus’s central bank. In New York, gold plunged 9.4% to $1,360.60 an ounce.
On the domestic front, the yellow metal has lost close to R2,600 in the last three trading sessions.
On the ground, consumers are still on the sidelines, postponing their purchases of gold. Jewellers, however, feel that the fall in gold prices will incentivise people to buy gold.
“We are happy that gold prices have fallen because it will encourage people to buy gold in the coming days,” said Rajeev Sheth, chairman and managing director, Tara Jewels.
“The timing of fall is also very good as Akshay Tritia is also nearing,” he said.
Akhsay Tritay, which is on May 13, is considered an auspicious occasion for buying gold.