Gold prices sheds Rs 100 to hit Rs 28,450 per 10 grams on Tuesday, hit by a subdued trend overseas and falling domestic demand due to the cash crunch sparked by demonetisation.
Silver, however, strengthened by Rs 100 to Rs 41,500 per kg on increased offtake by industrial units and coin makers. Traders said the global weakness of gold can be explained by a firming dollar ahead of the two-day US Federal Reserve meet, which kicks off on Tuesday.
There is speculation that the rate-setting panel would go for policy tightening sooner than later that would push up bond yields in US, which dented the safe haven appeal of gold. Globally, gold fell by 0.09 per cent to USD 1,160.90 anounce in Singapore.
A considerable drop in demand from jewellers and retailers in view of the existing cash crunch too hits entiment, they said.
On November 8, the government had announced its decisionto demonetise 500 and 1,000 rupee notes in a bid to flush out black money, leading to the cash drought. In the national capital, 99.9 per cent and 99.5 per cent purity gold drifted lower by Rs 100 each to Rs 28,450 and Rs 28,300 per 10 grams, respectively.
The yellow metal had gained Rs 100 on Monday. Sovereign, however, traded higher by Rs 100 to Rs 24,200 per piece of eight grams in scattered deals.
On the other hand, silver ready advanced by Rs 100 to Rs 41,500 per kg and weekly-based delivery by Rs 270 to Rs 41,490per kg. Silver coins remained unaltered at Rs 72,000 for buyingand Rs 73,000 for selling of 100 pieces.