Gold prices drop to 5-month low of nearly Rs 46000, silver slumps by 2.03%

Gold prices on Monday fell 1.3%, by Rs 600 to a record five-month low to Rs 46,019 per 10 grams on the Multi-Commodity Exchange (MCX). The prices of silver also witnessed a steep drop as the metal shed 1.6%, Rs 1,000 to Rs 63,983 per kg. The huge drop in the prices of the two metals comes as gold and silver rates were continuing to decline in India. Both gold and silver had plunged nearly Rs 1,000 and Rs 2,000 in previous sessions. 

Meanwhile, in global markets, the price of gold plunged by 4.4%, to a four-month low. Spot gold were down by 2.3% to $1,722.06 per ounce after touching $1,684.37, the lowest since March 31, in the session. The price of silver went down by 2.6% at $23.70 after it slumped 7.5% in the session.

The drop came alongside the fear of an increase of rates by the Federal Reserve as the US jobs data had improved in July. The US employers hired the most workers in the month of July in nearly a year and the rise in wages continued, the data showed, which boosted the dollar and benchmark US. 

The drop in prices of gold was also affected by wreak ETF flows as holdings in SPDR Gold Trust fell to 1,025.28 tonnes on Friday from 1,027.61 tonnes the previous day. SPDR Gold Trust is the world's largest gold-backed exchange-traded fund.