Gold Price Slumps Rs 1,650, Silver Plunges Rs 2,900

New Delhi, Nov 7 (PTI) Gold and silver prices slumped in the national capital on Thursday, with the precious metal declining Rs 1,650 and slipping below the Rs 80,000-mark, according to the All India Sarafa Association.

Tepid demand by local jewellers amid weak trend overseas as the primary reason behind the fall in prices, traders said.

The precious metal slipped Rs 1,650 to Rs 79,500 per 10 grams against the previous close of Rs 81,150 per 10 grams on Wednesday.

Silver, too followed suit, plunging Rs 2,900 to Rs 93,800 per kg on reduced offtake by industrial units and coin makers. It had traded flat at Rs 96,700 per kg on Wednesday.

Prices of gold of 99.5 per cent purity also slipped Rs 1,650 to Rs 79,100 per 10 grams. In the previous session, it had settled at Rs 80,750 per 10 grams.

Sentiment weakened on the back of subdued global trend, and the fall in demand in local jewellers put pressure on prices of gold, traders said.

Meanwhile, in futures trade on the Multi Commodity Exchange (MCX), gold contracts for December delivery is traded flat at Rs 76,655 per 10 grams.

"Gold traded in a flat to range-bound manner as market participants awaited the outcome of the Federal Reserve's (Fed) meeting tonight, with expectations leaning toward a 0.25 per cent rate cut," Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities, said.

However, silver contracts for December delivery fell Rs 9, or 0.01 per cent, to trade at Rs 90,811 per kg.

Comex gold futures fell USD 1.90 per ounce, or 0.07 per cent, at USD 2,674.40 per ounce in the Asian market hours.

"Gold prices plummeted as safe-haven flows dwindled amid Trump trade enthusiasm and capital flow shifted to riskier assets like bitcoin and equities markets," Saumil Gandhi, Senior Analyst of Commodities at HDFC Securities, said.

Moreover, a surge in the US Treasury yield and US dollar further impacted the value of precious metals, Gandhi added.

According to Kaynat Chainwala, AVP-Commodity Research, Kotak Securities, Comex gold prices saw a sharp decline and the drop came in the wake of Donald Trump's decisive win in the fiercely contested US presidential election, which boosted the US dollar, its highest level since July.

In the global markets, silver fell 0.24 per cent at USD 31.26 per ounce.

The Bank of England (BoE) on Thursday announced lowering of policy rate by 25 basis points (bps) to 4.75 per cent from 5 per cent following the November policy meeting.

This is the second consecutive rate cut since August.

However, policymakers said it would take longer for inflation in Britain to return to the bank's 2 per cent target.

Traders said the decision came in line with the market expectation.

On the market outlook for gold, traders said, the precious metal's future movement will depends heavily on the Fed's commentary and subsequent rate decisions. While rates are projected to decrease, the pace and extent of these cuts will be critical for the yellow metal's appeal.