Gold falls sharply by Rs 250 on MCX

All EU countries except the great Britain joined hands together to a common treaty where they agreed to work towards a tight fiscal budget to shore the Euro. But, the summit ended without any concrete plan to solve the nation's financial turmoil.

Overseas spot gold fell below the level of $1,700 and was seen trading at US$1,685 - $1,690 a troy ounce at 12:50 pm IST.

The same trend was seen on the Indian commodity bourses as well. Gold for February month delivery on the Multi Commodity Exchange (MCX) lost Rs 250 per 10 grams in an early session of the trade. It opened at Rs 29,090 per 10 grams and fell sharply to Rs 28,836. It was seen trading in the range of Rs 28,910 – Rs 28,915 per 10 grams.

The metal for April delivery contract also lost Rs 150 per 10 grams and was seen trading at Rs 28,223 per 10 grams.

Indian equities also dipped sharply after the government released gloomy IIP data for the month of October 2011. October IIP data stood at -5.1% against 2% reported in the month of September 2011.

Traders turned bearish about the markets and dumped their holdings on both BSE and NSE.

At 1:07 pm IST, the Bombay Stock Exchange was at 15,957, down by 255 points and the National Stock Exchange was at 4,785, down by 82 points.

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