Gold crashes by 1k per 10gm in Mumbai

Mumbai: Gold prices fell sharply by almost Rs 1,000 on Friday night to Rs 28,100 per 10gm, down from Rs 29,005 earlier in the day. With fears of a global slowdown taking a toll on international bullion prices, the industry fears that rates could eventually slide to Rs 22,000-23,000 in the run-up to Diwali. 

    In the international market, gold dropped more than 4% on Friday to its lowest since July 2011, breaking below $1,500 per ounce as bearish factors — including a draft plan for Cyprus to sell bullion — forced prices to capitulate. 
    In the Mumbai market, gold prices closed at below Rs 29,000 at Rs 28,890 per 10gm from Wednesday's close of Rs 29,390 (there was no trade on Thursday on account of Gudi Padwa). After market hours, fear gripped bullion traders who were attending a cricket match organized by the Bombay Bullion Association (BBA) at the police gymkhana at Marine Drive. Informaltrade conducted on the spot pulled the yellow metal's price further down to Rs 28,100. 
    Confirming the Rs 1,000 intra-day drop in gold prices, Kumar Jain, vice-chairman of the Mumbai Jewellers Association, said, "The international slowdown in gold prices has hit India in a significant way. Investors will be disappointed and will look to sell at the earliest opportunity. But this could be good news for retail buyers with the wedding season coming up in May. We saw fair sales at Gudi Padwa on Thursday and perhaps small buyers will approach the market with a further fall." 
    BBA president Mohit Kamboj was less optimistic. "The current scenario certainly does not make for a buyer's market. People will wait for prices to drop further. The sale of exchange-traded funds (ETFs) and short-selling by investors has contributed to the decline. However, maybe a correction was in order given the astronomical rise in bullion over the past few years," he said, while painting a similar picture for silver as well. 
    The May 13 festival of Akshay Tritiya, which is one of the most significant days for people to invest in bullion, may also witness a drop in sales.