Gold slumps to an 8-month low

Gold prices slumped further by Rs 45 per 10 gram to close at an eight-month low of Rs 5,110 on the bullion market here on Friday due to heav...

Gold prices slumped further by Rs 45 per 10 gram to close at an eight-month low of Rs 5,110 on the bullion market here on Friday due to heavy selling pressure after a sharp fall in the global prices. Silver, however, continued to attract good industrial support and closed better.

The news signalling the possibility of an early end to the war in Iraq which prompted investors and speculators to sell gold to buy stocks which were rising sharply, dealers said.

Standard gold (99.5 purity) continued to fall sharply and closed at Rs 5110, showing a steep fall of Rs 45 over the last close of Rs 5,155.

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Pure gold (99.9 purity) also resumed sharply lower at Rs 5165 and ended at Rs 5,150. Traders said gold had been hit by selling as investors pulled money out of traditional safe havens and moved back into currency and stock markets.

Ready silver (.999 fineness) started better at Rs 7,675 and closed at the same level. Gold has dived over the past two days, losing Rs 200 as the dollar and equities have risen on the US-led advance.

“Continued belief that the war in Iraq will be over very quickly is keeping the yellow metal under pressure and as a result we start to find the true value of gold,” said James Moore, an analyst.

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