Gold turns weak, silver below Rs 40,000 on sluggish demand

New Delhi: Gold shed Rs 50 to Rs 31,550 per 10 gram at the bullion market on Wednesday, owing to slackened demand from local jewellers amid a weak trend overseas.

Silver too slumped below the Rs 40,000-mark by plunging Rs 650 to Rs 39,350 per kg due to reduced offtake by industrial units and coin makers.

Bullion traders said fall in demand from local jewellers and retailers at existing levels and bearish trend overseas as investors focused on expectations that Federal Reserve may hike rates, mainly weighed on gold and silver prices.

Higher interest rates make gold a less attractive investment as it pays no interest.

Globally, gold fell 1.14 per cent to USD 1,323.70 an ounce and silver by 0.54 per cent to USD 16.62 an ounce in New York on Tuesday.

In the national capital, gold of 99.9 per cent and 99.5 per cent purity shed Rs 50 each to Rs 31,550 and Rs 31,400 per 10 gram, respectively. The precious metal had gained Rs 350 in last two days.

Sovereign however remained unaltered at Rs 24,800 per piece of eight gram.

In step with gold, silver ready plunged by Rs 650 to Rs 39,350 per kg and weekly-based delivery by Rs 405 to Rs 38,555 per kg.

Silver coins however continued to be traded at previous level of Rs 74,000 for buying and Rs 75,000 for selling of 100 pieces.