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    Gold prices drop 1%; good news during festivals

    Gold prices drop 1%; good news during festivals
    Indians buying gold during festivals have some reason to cheer as international gold prices dropped 1% on Friday, the highest per centage drop since July.

    Indian domestic gold tracks international prices and a continuing decline may augur well for those who want to purchase jewellery during the festive season. Unfortunately, however, the Indian rupee has also fallen against the dollar in the last few days, which might to some extent negate the effect of a decline in international price of gold.

    International spot gold ended Friday's session at $1,724 an ounce, after hitting a low of $1,715.79. Gold hit an all-time high of $1,920.30 September.

    Friday's drop in prices was on sustained selling pressure following weakness in equities across the globe, as corporate earnings particularly in the US remained weak.

    The euphoria over a quantitative easing III (QEIII), which was unleashed by Ben Bernanke is also slowly waning. In fact, gold had rallied substantially in September due to the QEIII.

    Analysts are expecting gold to drift lower, as the run-up of gold in the last few years, has beaten every asset class.

    Read more about: gold
    Story first published: Saturday, October 20, 2012, 10:05 [IST]
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