Thursday, May 16th 03:15 PM IST

Stage set for another scramble for Gold,Silver

# WGC  # central banks gold  # silver prices  

Silver dropped to the lowest since 2010 while gold dropped to its weakest level since the gold plunge in mid April on Thursday.

NEW DELHI(BullionStreet): Hints of another plunge in gold and silver prices could create another scramble for them, analysts said.

Silver dropped to the lowest since 2010 while gold dropped to its weakest level since the gold plunge in mid April on Thursday.

Silver dropped to $22.21 an ounce at 10.00 a.m GMT on Thursday while spot gold price plunged to $1,374.27 per troy ounce as weak inflation data took its toll on precious metals.

Gold dipped more than 2 per cent in a five-day losing streak that saw it hit two-year lows.

Gold is less than $60 away from two-year lows hit in mid-April. Prices have fallen nearly 18 percent this year and are well below a record top near $1,920 struck in September 2011.

Analysts attributed the drop in prices to a firmer dollar and as holdings in exchange-traded funds fell to the lowest in over four years, potentially stretching bullion's losing streak to a sixth day.

They said an overnight fall in the gold price below $1400 has sparked a sell-off of mining stocks, as commodities slipped on weak global economic data and a strengthening US dollar.

In Australia, third largest gold producer in the world, a sharp drop in the gold price for the second time in a month rattled it's fourth-largest mineral export industry, with gold producers making up seven of the top 10 losers on the ASX200 on Thursday.

Shares in gold giant Newcrest Mining fell 5.3 per cent to finish at $15.02, while Evolution Mining, Australia's fourth-biggest gold producer, suffered a sharp 11.23 per cent fall in its share price

WGC in it's latest report said the price drop in April, fuelled by non-physical moves in the market, proved to be the catalyst for a surge of buying that has left many retailers short of stock and refineries introducing waiting lists for deliveries.

Putting this into context, sales of bars and coins, jewellery and consumption in the technology sector still make up 81 per cent of the market, WGC added.

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