New Delhi/ Mumbai/Cheni/ Bengaluru/ Kolkata, July 20 : Gold prices in India dipped further on Monday to below Rs.25,000 per 10 grams - the lowest in two years - with the precious metal losing its sheen on account of bulk sales in Chi and hopes of rate hike in the US.
With festive season some two months away, stakeholders were divided over the demand and the trend in prices in the medium term, even as the country continued to rank among the top three importers and consumers of gold.
According to reports, some 33 tonnes were sold in the Shanghai spot market on Monday as investors sought to shift focus to other avenues, primarily expecting the US Federal Reserves to increase its interest rates for the first time in nearly a decade.
The price of gold in Bengaluru, for example, dipped to Rs.24,390 per 10 grams - the lowest since April 2013.
"Rate remained at Rs.24,390 per 10gm in the local market, same as on previous two days after declining from Rs.24,450 on Friday and Rs.24,740 on July 12 due to lower demand and negative sentiment," Venugopala Shetty, proprietor of Ganesha Jewellers, told IANS in Bengaluru.
"It is expected there will be huge demand in a day or two," said Rahul Gupta, director of the Delhi-based P.P. Jewellers told IANS. "The situation is almost like that of April 2013 when the price dipped to Rs.25,500 per 10 grams and the demand surged overnight." The development on Monday came despite India overtaking Chi as the largest importer of gold, at 769 tonnes in the last year.
"We expect the gold prices to fall by another Rs.30-40 per gram (22 carat) and settle down there," N. Antha Padmabhan, maging director of C Jewellers, told IANS in Cheni.
The falling gold price also pulled down the prices of silver. "Currently silver is priced at Rs.36,500 per kg. We expect it go down to Rs.35,000 per kg," said Padmabhan. Noting the US dollar is strengthening and the interest rates are expected to go up there, he said that hence there is pressure on the gold prices.
"The current downswing in Indian gold prices is directly related to the strengthening of the US dollar in recent times. We are hoping that the present trend may be arrested soon and the prices could stabilize within a month or so," said Mumbai Jewellers' Federation president Rakesh Shetty.