Gold Plunges Rs 700 Amid Peace Deal Hopes

New Delhi, Mar 24 (PTI) Gold prices plunged Rs 700 to Rs 90,550 per 10 grams in the national capital on Monday amid persistent selling by the jewellers and stockists, according to the All India Sarafa Association.

Besides, traders continued to liquidate long positions and book profit after a recent rally amid hopes for a potential Russia-Ukraine peace deal in view of talks between Ukrainian and US officials on Sunday in Saudi Arabia, to end three years of conflict.

The precious metal of 99.9 per cent purity had finished at Rs 91,250 per 10 grams on Friday.

Falling for the third day in a row, gold prices of 99.5 per cent purity declined by Rs 700 to Rs 90,100 per 10 grams from the previous close of Rs 90,800 per 10 grams.

"Gold prices retreated from record highs as geopolitical risks eased following discussions between Ukraine and the US on Sunday, exploring a potential peace deal with Russia.

"However, safe-haven demand for the yellow metal remains strong as tensions in the Middle East escalate, with Israel resuming strikes on Hamas in the Gaza Strip," Chintan Mehta, Chief Executive Officer at Abans Financial Services, said.

Silver prices, however, rose by Rs 200 to Rs 1,00,500 per kg from Friday's closing level of Rs 1,00,300 per kg.

Despite the recent dip, gold's bull run is expected to continue, driven by expectations of deeper rate cuts from the US Federal Reserve (Fed), Mehta added.

Meanwhile, spot gold went up 0.22 per cent at USD 3,028.90 per ounce in the international markets.

According to HDFC Securities' Senior Analyst of Commodities Saumil Gandhi, investors will be awaiting for macroeconomic data to be release later on Monday from the US, including provisional S&P Global Manufacturing PMI data and a Fed member Raphael Bostic speech.

The data release and Bostic's commentary will provide more clues on the future monetary policy and trajectory for the bullion prices.