NEW DELHI: Weak financial markets contributed to the fall in gold prices on Friday which plunged by Rs 350 to settle the day at Rs 12,950 per ten gram in the bullion market as jittery investors offloaded their holdings to pay for the losses.
Standard gold and ornaments dropped by Rs 350 each at Rs 12,950 and Rs 12,800 per ten gram respectively. Soverign also fell by Rs 50 at Rs 10,650 per piece of eight gram.
Marketmen said deepening global credit crisis influenced all the financial markets, including gold and silver. Major market participants lost heavily following a steep fall in equity markets and now they are shedding their stake in other assets, including gold to compensate for losses, they said.
Investors and retailers confidence remained shattered and they postponed their buy for the current festive season on expectations of further big falls, they added.
"Symbolic buying in gold by ladies on Karva Chauth today was negligible as some pinched by higher prices and some expect further falls," Omsons Jeweller owner Ashok Verma said.
"Keeping in mind the current sluggish demand, we do not expect a better time ahead when marriage season starts," Anand said, adding a tight money market further dampening the trend.
Another Delhi-based Jeweller Gaurav Anand said the market sentiment turned worst as demand plunged nearly 40 per cent during this Diwali season.
Silver prices on Friday dropped by Rs 50 to Rs 17,550 per kg, a level last seen on September 20, 2007, due to selling pressure.
Silver ready fell by Rs 50 to Rs 17,550 per kg and weekly-based delivery by Rs 70 to Rs 17,600 per kg. Silver coins declined by Rs 100 to Rs 28,200 for buying and Rs 28,300 for selling of 100 pieces.
