MUMBAI: Gold futures in India, the world's biggest buyer of the metal, dropped nearly 3 per cent on Monday to hit their lowest level in 15-1/2 months, mirroring losses in the world market.
At 0516 GMT, the key gold contract for June delivery on India's Multi Commodity Exchange was down 2.64 per cent at Rs 27,189 ($500)per 10 grams, after falling to rs 27,100 earlier, the lowest level since December 30, 2011.
In the overseas market, gold prices took a dramatic U-turn on Monday, reversing early gains to drop to a two-year trough afterbullion futures fell on fears about central bank sales and holdings on global exchange-traded funds sank to their lowest in more than a year.
Gold hit an intraday high at $1,495.16 an ounce, but then plunged to $1,427.14, its lowest since April 2011. It stood at $1,441.69 by 0335 GMT, down $36.66, and the metal has slipped around 14 per cent so far this year, after rising for the last 12 years.
"Breaking $1,500 is not a good sign for gold. We don't know what the next support level is going to be," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
The wedding season has begun in India and will continue till early June. Akshay Tritiya, the second biggest gold buying festival after Dhanteras, also falls in this period.
Investors have recently been dumping gold, which has dropped for the past three straight weeks, and flocking to equity markets for better returns. Even escalating tensions on the Korean peninsula have failed to burnish its safe-haven appeal.
Investors cut exposure to gold, with total holdings at the world's major bullion gold-backed exchange-traded-funds falling to their lowest since early 2012.
At 0516 GMT, the key gold contract for June delivery on India's Multi Commodity Exchange was down 2.64 per cent at Rs 27,189 ($500)per 10 grams, after falling to rs 27,100 earlier, the lowest level since December 30, 2011.
In the overseas market, gold prices took a dramatic U-turn on Monday, reversing early gains to drop to a two-year trough afterbullion futures fell on fears about central bank sales and holdings on global exchange-traded funds sank to their lowest in more than a year.
Gold hit an intraday high at $1,495.16 an ounce, but then plunged to $1,427.14, its lowest since April 2011. It stood at $1,441.69 by 0335 GMT, down $36.66, and the metal has slipped around 14 per cent so far this year, after rising for the last 12 years.
"Breaking $1,500 is not a good sign for gold. We don't know what the next support level is going to be," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
The wedding season has begun in India and will continue till early June. Akshay Tritiya, the second biggest gold buying festival after Dhanteras, also falls in this period.
Investors have recently been dumping gold, which has dropped for the past three straight weeks, and flocking to equity markets for better returns. Even escalating tensions on the Korean peninsula have failed to burnish its safe-haven appeal.
Investors cut exposure to gold, with total holdings at the world's major bullion gold-backed exchange-traded-funds falling to their lowest since early 2012.
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