Gold on Wednesday witnessed its second biggest loss this year of Rs. 600 to Rs. 27,300 per 10 grams due to reduced offtake amid weak global trend.
Silver prices followed suit and dropped by a massive Rs. 800 to Rs. 44,700 per kg on reduced offtake by jewellers and industrial units.
Traders said hectic selling by stockists on the back of sluggish demand at prevailing higher levels and a steep fall in global markets, mainly pulled down both gold and silver prices.
This is gold's second biggest fall this year since since April 15, when it had plunged by Rs. 1,160 to Rs. 26,640 per 10 grams.
Gold in London, which normally sets the price trend on the domestic front, dropped to three-week low as a stronger dollar curbed demand for an alternative investment and bullion holdings declined, also dampened the sentiment, they said.
Besides, shifting of funds from weakening bullion to rising equity also influenced the precious metals.
On the domestic front, gold of 99.9 and 99.5% purity tumbled by Rs. 600 each to Rs. 27,300 and Rs. 27,100 per 10 grams, respectively, after surging Rs. 380 each in yesterday. Sovereigns, however, held steady at Rs. 24,000 per piece of eight grams in scattered deals.
In a similar fashion, silver ready plunged by Rs. 800 to Rs. 44,700 per kg and weekly-based delivery by Rs. 930 to Rs. 43,940 per kg.
However, silver coins continued to be asked around previous level of Rs. 75,000 for buying and Rs. 76,000 for selling of 100 pieces.