Gold prices crashed Rs. 1,250 to a one-year-low of Rs. 28,350 per 10 gm on Saturday, its biggest one-day fall, as panic-stricken investors and speculators sold their holdings on fears that debt-ridden euro zone member Cyprus may be forced to sell bullion. The announcement of worse-than-expected US economic data accentuated those fears.
Earlier, gold prices had crashed in global markets to fall below $1,500 (about Rs. 80,000) per ounce for the first time since July 2011. Experts expect gold prices to fall further.
Many people in Delhi, however, did not wait for prices to fall further. The Tribhovandas Bhimji Zaveri showroom at Janpath witnessed a Dhanteras-like rush as people queued up to buy jewellery and coins. By evening, the showroom had exhausted its entire stock of gold coins.
At Mehrasons, another leading jeweller in Delhi, an employee, who spoke on condition of anonymity, said footfalls during the day was higher than usual.
“Prices will fall further on Monday and Tuesday. It might rise again after that,” said Vimal Kumar Goel, president of Delhi Bullion Jewelers Welfare Association.
Unlike in Delhi, however, people in Mumbai did not rush to buy gold. “Buyers have become cautious and are waiting for prices to fall further,” said Mehul Choksi, chairman and managing director, Gitanjali Gems. “There was no rush for buying gold today,” he said.
Silver prices, too, declined to a 15-month low and ended below the Rs. 51,000 per kg level.
“We expect gold prices to decline by a further Rs. 500-1,000 over the next few days,” said Naveen Mathur, associate director, commodities and currencies, Angel Broking, a leading player in the bullion market. “People who can stay invested for 3-5 years may consider buying at Rs. 27,000 levels,” he added.