Gold rate suffers huge fall in India

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New Delhi: Gold rate suffered the steepest single day fall in India by plunging Rs. 1,540 to Rs. 25,800 per 10 gm in opening trade yesterday on panic selling after a meltdown in global bullion markets.

In Asia, gold prices tumbled about USD 124, followed by over USD 100 in the previous session, as equities and other commodities fell on speculation that European governments will struggle to contain the euro zone’s debt crisis, threatening global growth.

In Singapore, gold tumbled 124 dollar to USD 1,532.72 an ounce and silver by 9.70 per cent to USD 26.07 an ounce.

Back home, silver dropped by Rs. 3,200 to Rs. 50,800 per kg as the metal in overseas markets recorded its worst two-day drop in 31 years. Silver in Delhi had lost Rs. 10,500 in last two sessions.

Gold’s long-term rally has come to a grinding halt in the past three weeks, with prices down nearly 20 percent from a record peak hit on September 6.

Analysts cite dollar strength, liquidation by hedge funds looking to cover losses in other markets and volatility undermining gold’s appeal as a safe haven as possible reasons for the sharp falls.

Spot silver, far more vulnerable to worries about economic growth because of its industrial uses, hit its lowest since January, and is down 45 per cent from its April peak.