Gold prices declined by Rs 200 at Rs 26,200 per ten grams in the national capital on Monday amidst weak trend overseas and increased supplies in domestic spot markets after the Reserve Bank eased import curbs.
Besides, fall in demand from jewellers and retailers at prevailing levels on expectations of further drop in precious metal prices in coming days dampened the trading sentiments, traders said.
In line with overall weak trends, silver extended its slide and recorded a steep fall of Rs 1,080 to Rs 34,300 per kg on reduced offtake by industrial units and coin makers.
Traders said sentiment turned distinctly weak after gold prices slumped in global markets as Swiss voters rejected a plan for their central bank to accumulate bullion and oil extended its decline to five-year low, curbing demand for the precious metal.
Silver also plunged to the lowest level since 2009 as the dollar climbed.
Further, pick-up in supplies supported by RBI easing curbs on import of the precious metal by scrapping 80:20 scheme also put pressure on gold prices, they said.
"Gold may see further fall in its prices in coming days and is likely to touch Rs 25,500-mark as supplies started picking up after the RBI move," All India Sarafa Association vice president Sureinder Kumar Jain said.
Globally, gold in Singapore, which normally sets price trend on the domestic front, fell 2.1% to $1,142.88 an ounce, the lowest level since November 7 and silver nosedived by over 8% to $14.42 an ounce, the lowest price since August 2009.
In Delhi, gold of 99.9 and 99.5% purity plunged by Rs 200 each to Rs 26,200 and Rs 26,000 per ten grams, respectively.
The precious metal had lost Rs 530 in the past five days. Sovereign, however, held steady at Rs 23,600 per piece of eight grams in limited deals.
In a similar fashion, silver ready tumbled by Rs 1,080 to Rs 34,300 per kg and weekly-based delivery by Rs 605 to Rs 33,920 per kg.
Silver coins also plunged by Rs 3,000 to Rs 58,000 for buying and Rs 59,000 for selling of 100 pieces.