Gold Slides 3 Per Cent On Fresh Worries Over Easing

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Gold prices fell by nearly 3.3 per cent in the international markets to a low of of 1,266 an ounce, on reports of tapering of bond purchases by the European Central Bank.

Gold Slides 3 Per Cent On Fresh Worries Over Easing
When tapering happens, it leads to less liquidity in the global financial system, which is not good news for gold. A slide in gold prices across the globe, also tends to drag down prices of gold in India. In Mumbai, gold of 22 karats was trading at Rs 29,250, which was lower and in line with the global markets.

Gold in Indian cities may continue to be weighed down by international prices. There a number of global worries at the moment, including the possibility of a US Federal Reserve hike in interest rates in the United States.

When that happens investors tend to sell gold and move toward fixed yielding government instruments, which offer higher interest rates.

In India gold has seen a fantastic rally in the last few months and there maybe some selling pressure that could come, as the year draws to an end.

With the festive season in India, now a few days away, we might see increased demand for the precious metal. Check gold rates in Indian cities here

Read more about: gold
Story first published: Wednesday, October 5, 2016, 12:42 [IST]
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