Gold slumps by Rs. 380, silver by Rs. 2,200 on heavy sell-off

Gold prices tumbled to Rs.31,020 per 10 grams and silver also dropped to Rs. 56,900 per kg on heavy sell off by stockists in tandem with a steep fall in overseas markets.

Gold prices tumbled by Rs. 380 to Rs. 31,020 per 10 grams on Friday on heavy sell off by stockists in tandem with a steep fall in overseas markets.

With the general weakening trend, silver also dropped by Rs. 2,200 to Rs. 56,900 per kg on reduced offtake by industrial units and coin-makers.

Traders said sentiment turned extremely bearish after gold tumbled in global markets, as Federal Reserve policy makers said they will probably end asset purchases this year and investors cut holdings by the most since May.

In Singapore, gold fell by $ 24.40 to $ 1,639.40 an ounce, the lowest since December 21 and silver by 2.5% to $ 29.42.

Besides, sluggish demand at prevailing higher levels also dampened the trading sentiment.

On the domestic front, gold of 99.9 and 99.5% purity plunged by Rs. 380 each to Rs. 31,020 and Rs. 30,820 per 10 grams, respectively. The metal had gained Rs. 475 in last four trading sessions.

Sovereigns followed suit and shed Rs. 50 to Rs. 25,400 per piece of eight grams.