Gold Price Falls Rs 1,000 to Rs 70,650: Sluggish Demand, Global Cues

New Delhi, Jul 25 (PTI) Gold prices continued to fall for the third day and tumbled Rs 1,000 to Rs 70,650 per 10 grams in the local market here on Thursday amid heavy selling by jewellers, triggered by a fall in rates in overseas markets.

According to the All India Sarafa Association, the yellow metal prices had closed at Rs 71,650 per 10 grams in the previous session on Wednesday.

Continuing its slide for the third day in the national capital, gold of 99.9 per cent and 99.5 per cent purity declined Rs 1,000 each to Rs 70,650 per 10 grams and Rs 70,300 per 10 grams, respectively.

Silver prices also fell sharply by Rs 3,500 to Rs 84,000 per kg. It had ended at Rs 87,500 per kg in the previous session.

The precious metal has declined Rs 5,000 per kg in the past three sessions since July 23 when it had fallen Rs 3,350 to end at Rs 72,300 per kg -- marking the biggest fall this year -- after the government on Tuesday decided to slash customs duties on a range of products, including gold and silver.

The customs duty on gold and silver was cut from 15 per cent to 6 per cent.

Traders said gold prices declined on persistent selling by local jewellers amidst weakening trend in the international markets.

Globally, Comex gold was trading at USD 2,421.80 per ounce, down USD 42.20 per ounce.

"Gold and silver prices are trading lower tracking broad selling across global financial markets, triggered by a sharp appreciation in the Japanese yen on rising bets of a rate hike by the Bank of Japan at its meeting next week, whereas other central banks are looking for rate cuts," Pranav Mer, VP -- Research (Commodity & Currency) at BlinkX and JM Financial, said.

Prices now are stuck in a range as we look ahead to US data on GDP and Personal Consumption Expenditures (PCE) price index inflation data, Mer added.

In addition, silver also quoted lower at USD 28.04 per ounce in New York.

According to Saumil Gandhi, Senior Analyst of Commodities, HDFC Securities, gold traded lower in European trading hours on Thursday.

Further, technical selling and long liquidation drove gold prices lower, prior to the release of crucial US economic data, Gandhi said.