International gold prices headed for their worst quarter with a 25% drop in the three months through June as the European debt crisis and the scheduled rollback of bullion-friendly stimulus measures in the US hurt the metal in the absence of robust Asian demand.
On Friday, the precious metal was hovering around its meanest level since August 2010 in the US, while it hit a 23-month low in Delhi, mainly due to a weak rupee.
The massive fall in gold started around mid-April when reports that debt-hit Cyprus would offload its gold reserves to meet stringent bailout conditions offered by the European Central Bank stoked fears of other struggling nations in the zone following suit. The precious metal hit a more than two year low of $1,321 an ounce in April before easing further to touch its weakest since September 2010 on June 20 on a broad sell-off stoked by the US Federal Reserve's explicit signal to end the era of easy money. Gold tends to benefit from loose monetary policy as it is considered a hedge against inflation, and it also gains strength from the weakness of the dollar.
Spot gold dropped to a near three-year low of $1,180.71 an ounce in intraday trade on Friday, although it pared back some of the losses to $1,202.56 an ounce by 1152 GMT, up 0.3% from the previous session. US August gold futures tumbled $9.60 to $1,202.10 an ounce. In Delhi, gold prices lost Rs 1,150 to Rs 25,650 per 10 grams, while
