Gold prices tumbled by Rs 3,350 to Rs 72,300 per 10 grams in the local market here on Tuesday amid subdued demand by jewellers after the government announced the customs duty cut on the yellow metal and silver to 6 per cent.
According to the All India Sarafa Association, silver prices also nosedived by Rs 3,500 or 4 per cent to Rs 87,500 per kg. In the previous session, it had closed at Rs 91,000 per kg.
The precious metal rates dropped by Rs 3,350 or 4.6 per cent to Rs 72,300 per 10 grams. On Monday, the precious metal rates had closed at Rs 75,650 per 10 grams.
In addition, gold of 99.5 per cent purity plummeted by Rs 3,350 to Rs 71,950 per 10 grams. It had settled at Rs 75,300 per 10 grams in the previous session.
Traders attributed the decline in gold prices after the government slashed customs duties on a range of products, including gold and silver, to cut input costs, increase value addition, promote export competitiveness and boost domestic manufacturing.
Silver declined by Rs 6,900 in the past five sessions since July 18, when it had fallen by Rs 400 to end at Rs 94,000 per kg.
On the Multi Commodity Exchange (MCX), gold futures plunged Rs 3,860 or 5.31 per cent to trade at Rs 68,858 per 10 grams.
The most traded August contract hit a four-month low of Rs 68,500 per 10 grams on the MCX.