Gold declines 4%, largest 1-day fall

Continuing to be under the downward pressure, standard gold on Wednesday witnessed the largest single-day slump, by 4 per cent or Rs 365, to Rs 8,470 per 10 gm. The price of pure gold (99.9) tumbled by Rs 370 to Rs 8,515, recording its highest ever fall since 1996.

The historical decline is mainly attributed to the global downtrend in commodities, and many analysts feel the uptrend in the sector is over.

A section of traders believes the current correction will end soon, and the last great buying opportunity has opened up for the investors, who had squandered the great opportunity before the boom started.

Traders are still upbeat about the future of the single largest worldwide investment option.

Suresh Nair, VP of Kotak Commodity Services, said, "The markets are expected to focus on technical damage done yesterday. Gold also broke down below the key psychological support levels of $600 in Comex and its 100-day moving average at $609. Markets' inability to bounce back from

intra-day lows by the close, yesterday, reflects further weakness. Fundamental pressure will continue to come in from views of the Central Bank (London), US dollar strength and volatile global stock markets."

For clear trends, the markets will await the results of the next US Federal Reserve meeting on June 28 "� in context of interest rates, he added.

Analysts believe the precious metal will regain its upward momentum very soon, but no huge gains "� like all-time highs "� are expected at least from the present level of trade. In India, wedding season begins in September and, therefore, demand for gold starts to pick up sometimes around this month.

The gold demand traditionally slows in rainy season "� during June-July, but jewellery manufacturers may restock the metal for anticipated demand in seasons like Christmas.