Gold falls more than Rs 1000 in a single day

Business

oi-Monika Nihalani

By Monika Nihalani

Published: Thursday, August 25, 2011, 14:18 [IST]

After an extended bull run, gold has dropped by more than 8% on Thursday from its all time highs above Rs 28,000. Profit booking seems to be the only thing over the minds of investors.

The most traded commodity gold for October delivery on MCX opened at Rs 26,249 per 10 grams and then went on falling ride. It touched all-time low at Rs 25,930 per 10 grams in morning trade.

It was trading between Rs 26,030 – Rs 26,036 per 10 grams around 11:08 am IST.

Gold for delivery in far-month April opened low at Rs 26,924 per 10 grams. It was trading in the range of Rs 26,769 – Rs 26,800 per 10 grams same time.

On Friday, the Federal Reserve Chairman, Ben Bernanke will be speaking at the at the US central bank's symposium at Jackson Hole. This is the most awaited part for the investors around the globe. They are hoping for some signs of positive news from Fed Chairman.

If he comes out with another round of Quantitative Easing (QE3), then that could turn commodities again in one spiral downturn.

Margins requirement for gold futures have also been hiked by CME group, which is also cause of concern for most of the gold investors.

CME, the largest futures market, raised initial margin requirement by 27% with effect from the close of business on Thursday.

(To understand about the margin, click here)

Fall in gold prices can cheer many of the gold buyers because marriage season is still on, but can upset gold futures investors who are long on the commodity.

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