Gold loses its shine by Rs100 on cash crunch and weak global cues

Gold prices declined by Rs 100 to Rs 29,350 per 10 grams on Wednesday due to low demand on account of prevailing cash crunch in the domestic market following demonetisation of high value notes as well as a weak trend overseas.

While, silver recovered by Rs 700 to Rs 41,435 per kg on increased offtake by industrial units and coin makers. Traders said apart from a weak trend overseas, muted demand from jewellers and retailers in view of scarcity offunds weighed on gold prices. Government earlier this month had scrapped 500 and 1,000 rupee notes to crack down on black money, leading to cash crunch in the financial system.     

Globally, gold fell by 0.11 per cent to USD 1,186.60 anounce in Singapore. In the national capital, gold of 99.9 per cent and 99.5 per cent purity declined by Rs 100 each to Rs 29,350 and Rs 29,200 per 10 grams, respectively.

The precious metal had gained Rs 50 on Tuesday's trade. Sovereign, however, held steady at Rs 24,400 per piece of eight grams in scattered deals. On the other hand, silver ready rebounded by Rs 700 to Rs 41,435 per kg and weekly-based delivery by Rs 600 to Rs 40,835 per kg.   Whereas, silver coins remained steady at Rs 74,000 for buying and Rs 75,000 for selling of 100 pieces.