Gold loses shine; down by Rs60 on Diwali eve

The prevailing festive mood failed to boost gold prices and they softened by Rs60 at Rs16,020 per 10 gm in the bullion market here today on Diwali eve, as retailers decided to give the precious metal a miss at the existing higher levels.

Marketmen said a rally in gold prices, which climbed to an all-time high of Rs16,250 on Wednesday, a day before 'Dhanteras', was snapped on falling demand among retailers and jewellers.

They said Diwali and Dhanteras, traditionally considered most important festivals in Hindu mythology to make new purchases in gold and silver, failed to boost trading sentiment owing to existing higher levels.

"We normally expect maximum business on Diwali festival but see hardly any customers this season because of higher prices," said All India Sarafa (Bullion) Bazar president Sheel Chand Jain.

He said the market is passing through a tough time following tight money market position in the wake of the biggest global recession ever since World War-II.

Delhi-based bullion merchant Ravi Jalan said, "The yellow metal is losing traditional value nowadays and is more co-related with the forex and moving in opposite direction to the US currency."

Marketmen said trading sentiment also turned weak on softening trend in global markets, which normally set prices in the domestic market.

Gold dropped the most to USD1,050 per ounce in three weeks, paring its third weekly advance in international markets as the US dollar briefly rebounded, erasing demand for the metal as an alternate investment.

Back home, the selling pressure was extended to silver too. Silver ready dropped by Rs400 to Rs26,900 per kg. Silver weekly based delivery lost Rs595 to Rs26,725 per kg.

Silver coins continued to be asked at last level of Rs32,800 for buying and Rs32,900 for selling of 100 pieces.

Standard gold and ornaments fell further by Rs60 each at Rs16,020 and Rs15,870 per 10 gram, respectively.

Sovereign was down by Rs50 to Rs12,950 per piece of eight gram.