Gold fell below $ 1,200 on Friday to its lowest since August 2010 before recovering, and is on track to post its worst quarter since at least 1968 on persistent worries over the US Federal Reserve’s plan to wind down its monetary stimulus.
Bullion has taken a beating since the beginning of last week — losing as much as 15% or about $ 200 an ounce — after Fed chairman Ben Bernanke laid out a strategy to roll back the bank’s $85 billion monthly bond purchases in the face of a recovering economy.
The lower prices have failed to rekindle physical demand in Asia, traditionally the biggest buyer of gold, and investors have continued to exit exchange-traded gold funds (ETFs).
Gold prices tumbled to a 23-month low by losing Rs 1,150 to Rs 25,650 per 10 grams in the national capital on heavy selling by stockists and investors, triggered by a steep fall in overseas markets. All round selling by stockists on free-fall in overseas markets and investors shifting their funds to surging equities mainly pulled down the gold prices to a level last seen on August 9, 2011.