Gold plunges Rs 250 after US Fed policy move

New Delhi: Gold lost its edge today by tumbling Rs 250 to Rs 30,500 per 10 grams because of a rising dollar on stronger probability of a rate hike by the US Federal Reserve this year.

Silver also dropped Rs 600 to Rs 40,300 per kg, taking a hit from reduced offtake by industrial units and coin makers.

A weak global trend prevailed where gold fell to its lowest level in over three weeks.

The dollar grew in clout as chances of an increase in interest rate in the US became more distinct, given the latest policy move by the Fed, where it kept the benchmark interest rate unchanged and announced the gradual end to a crisis-era stimulus programme. This curbed the demand for precious metals, traders said.

Globally, gold was down 0.21 per cent at USD 1,297.80 an ounce in Singapore after dropping to the lowest since late August at USD 1,295.65.

In the national capital, gold of 99.9 per cent and 99.5 per cent purity slumped by Rs 250 each to Rs 30,500 and Rs 30,350 per 10 grams, respectively.

The yellow metal had gained Rs 150 on Wednesday. Sovereign, however, continued to be traded at the last level of Rs 24,700 per piece of eight grams in limited deals.

Silver ready dropped by Rs 600 to Rs 40,300 per kg and weekly-based delivery by Rs 655 to Rs 39,665. Silver coins, however, remained flat at Rs 74,000 for buying and Rs 75,000 for selling of 100 pieces.