Gold prices slumped to a 15-month low of Rs.27,600 per 10 gm in Delhi and Rs.26,690 per 10 gm in Mumbai on Monday, shedding an identical Rs.750 in both cities, accentuating a trend seen on Saturday when the price of the precious metal had plunged Rs.1,250.
Gold prices have, thus, shed Rs.2,000 per 10 gm in two trading days, but retail buyers stayed away from the market in expectation of a further dip in prices.
Analysts said the prospects of any meaningful recovery remain weak. “Indians’ confidence in gold has diminished. The sudden fall in prices has created some kind of panic. Many buyers think prices will fall further; so, they prefer to wait,” said Mohit Kamboj, president, Bombay Bullion Association.
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“Wait for two weeks more. For investors, it will be an opportunity if the price falls to Rs.25,000-levels,” added Navin Mathur, associate director, Angel Brokig.
“While gold purchases will be attractive now for those who were waiting for prices to fall, those who are investing for the short term need to reassess plans,” said Jayant Manglik, president retail, distribution, Religare Securities, a leading investment and research firm.
“Systematic monthly investments via e-gold and electronically traded funds (ETFs) remain the best way to invest in gold.”
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Kishore Narne, head of commodities, Motilal Oswal Securities, felt the metal would fall a further 15-20% by March 2014.
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Gold prices fell below $1,400 per ounce in London on Monday for the first time since March 2011 as the market’s downward momentum gained speed.
Spot gold dropped to a low of $1,384.69 an ounce before recovering slightly to $1,409.26. Markets in the US and Japan also witnessed the same trend.
(With inputs from agencies)