GOLD @ 15 1/2 MONTH LOW

Gold futures in India, the world's biggest buyer of the metal, dropped nearly 3 percent on Monday to hit their lowest level in 15-1/2 months, mirroring losses in the world market.At 10.46 a.m, the key gold contract for June delivery on Multi Commodity Exchange was down 2.64 percent at 27,189 rupees per 10 grams, after falling to 27,100 rupees 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 after bullion futures fell on fears about central bank sales and holdings on global exchange-traded funds sank to their lowest in more than a year.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.

In the Retail Market Gold prices today tumbled by Rs 750 to Rs 27,600 per 10 grams to hit an over 15-month low in the national capital due to persistent selling by stockists triggered by a heavy sell-off in global markets. The precious metal, which had suffered the most ever in the previous session by losing Rs 1,250, today fell further to touch its lowest level since December 31, 2011. Silver followed suit and plunged by Rs 2,100 to Rs 48,000 per kg in continuation to a drop of Rs 2,500 on Saturday on poor offtake by industrial units and coin makers. Selling further gathered momentum as gold on the global front plunged to the lowest level since April 2011 on speculation that some central banks selling and expectations of some economic recovery. In London, gold dropped by USD 90.70, or 6.14 per cent, to USD 1,386.30 an ounce. Silver also fell by 10.52 per cent to USD 23.13 an ounce. Besides on the domestic front, weak trend at the futures market, where both the precious metals, silver and gold, hit their daily lower limits, further fuelled the downtrend. Also in the spot market, gold of 99.9 and 99.5 per cent purity tumbled by Rs 750 each to Rs 27,600 and Rs 27,400 per 10 grams, respectively. Sovereigns declined by Rs 100 to Rs 24,700 per piece of eight grams. In line with a general weak trend, silver ready dropped further by Rs 2,100 to Rs 48,000 per kg and weekly-based delivery by Rs 2,880 to Rs 45,900 per kg. Silver coins plummeted by Rs 3,000 to Rs 74,000 for buying and Rs 75,000 for selling of 100 pieces.  

2 YEAR LOW IN GLOBAL MARKET 
Gold today slumped to a two- year low after dropping into a bear market last week as optimism that a US recovery will curb the need for stimulus cut demand for a protection of wealth. The precious metal slid 4.5 per cent to USD 1,416.65 an ounce, rebounding from as low as USD 1,404.05. Last week's 6.2 per cent drop was the most since December, 2011. Silver also dropped 9.2 per cent to USD 23.6 an ounce, the lowest since October 28. Prices entered a bear market on April 2. Bullion slid 5 percent on April 12, taking losses to more than 20 percent since the record close in September 2011, and meeting the common definition of a bear market. It fell as much as 5.3 per cent today to the lowest since March 18, 2011. Holdings in the SPDR Gold Trust, the biggest gold-backed exchange-traded product, are the lowest in almost three years and hedge funds have cut bets on higher prices by 72 per cent since October. The metal climbed for a 12th year in 2012 as nations pledged more stimulus to bolster growth. Prices are down 15 per cent this year as some Federal Reserve policy makers favor pulling back this year on USD 85 billion in monthly debt- buying and as US equities reached a record high. The turn in the gold cycle is quickening and investors should sell, Goldman Sachs Group said. Prices also fell last week on speculation Cyprus may sell gold. Commodities declined to the lowest since July as a data showed China's economy grew less than estimated.