While gold dropped by Rs 330 to Rs 26,370 per 10 grams, matching its price on August 10, 2011, silver prices plunged by Rs 1,530 to Rs 42,170 per kg, a level last seen on November 26, 2010.
Selling pressure gathered momentum as precious metals in global markets extended their longest slump in four years as investment holdings contracted and stocks rallied and dollar surged against other currencies.
In global markets, which normally sets the price trend on the domestic front, silver tumbled 7 per cent to USD 20.69 an ounce, gold by 1.5 per cent to USD 1,338.85 an ounce.
Weak trend at futures trade as speculators offloaded their positions to shift their funds to rising equities, further fuelled the sentiment, they said.
Besides, fall in demand due to off marriage season and retail customers expecting more correction in the bullion prices was another dampening factor, they added.
On the domestic front, silver ready dropped by Rs 1,530 to Rs 42,170 per kg and weekly-based delivery by Rs 1,485 to Rs 41,170 per kg. Silver coins nosedived by Rs 3,000 to Rs 72,000 for buying and Rs 73,000 for selling of 100 pieces.
Similarly, gold of 99.9 and 99.5 per cent purity tumbled by Rs 330 each to Rs 26,370 and Rs 26,170 per 10 grams, respectively. Sovereigns, too, plunged by Rs 200 to Rs 23,500 per piece of eight grams.
In a note for the Cabinet Committee on Economic Affairs (CCEA), the ministry has proposed raising gas price for state-run firms immediately and that for RIL from April 2014, sources privy to the development said.
ONGC / OIL and RIL currently get $4.2 per million British thermal unit as the price of natural gas.
The ministry wants Rangarajan Committee recommendation of pricing domestically produced natural gas at an average of international hub prices and cost of imported LNG instead of present mechanism of market discovery be accepted with a minor modification.
Instead of Rangarajan panel’s suggestion of calculating gas price every month, the ministry has proposed notifying the gas price on a quarterly basis. The gas price based on average of April-June rates would come to $6.775 per mmBtu, much less than doubling of rates previously expected.
Sources said the hike in natural gas price by $1 would result Rs. 3,155 crore per annum hit on fertiliser plants for producing 23 million tons of urea this fiscal and Rs. 4,144 crore a year for 32 million tons of urea production from 2017-18.
The impact of every US dollar increase in gas price would be about Rs. 10,040 crore per annum on the power sector for 28,000 MW of electricity generating capacity.
The price of oil fell Monday ahead of the release later this week of economic data from the US and China, the world`s two largest economies, and a speech by the Federal Reserve chief.
Benchmark crude for June delivery was down 25 cents to USD 95.77 a barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract rose 86 cents to close at USD 96.02 a barrel on Friday.
Later in the week, the US government will release home sales and durable goods orders for April and HSBC will release its monthly survey on China’s manufacturing growth.
Analysts are also awaiting testimony Wednesday from Ben Bernanke, who heads the US central bank. Of special interest are any possible hints that the Fed might be preparing to scale back its super-loose monetary policy because recent data has pointed toward a sustained economic recovery.
“Markets will be watching closely for any signs of what the Fed’s next move will be,” said analysts at DBS Bank Ltd. in Singapore in a commentary.
Brent crude, a benchmark for many international oil varieties, fell 11 cents to USD 104.35 a barrel on the ICE Futures exchange in London.
Extreme global warming is less likely in coming decades after a slowdown in the pace of temperature rises so far this century, an international team of scientists said on Sunday.
Warming is still on track, however, to breach a goal set by governments around the world of limiting the increase in temperatures to below two degrees Celsius (3.6 Fahrenheit) above pre-industrial times, unless tough action is taken to limit rising greenhouse gas emissions.
“The most extreme rates of warming simulated by the current generation of climate models over 50- to 100-year timescales are looking less likely,” the University of Oxford wrote about the findings in the journal Nature Geoscience.
The rate of global warming has slowed after strong rises in the 1980s and 1990s, even though all the 10 warmest years since reliable records began in the 1850s have been since 1998.
The slowdown has been a puzzle because emissions of heat-trapping greenhouse gases have continued to rise, led by strong industrial growth in China.
Examining recent temperatures, the experts said that a doubling of carbon dioxide concentrations in the atmosphere above pre-industrial times – possible by mid-century on current trends – would push up temperatures by between 0.9 and two degrees Celsius (1.6 and 3.6F).
That is below estimates made by the UN panel of climate scientists in 2007, of a rise of between one and threee degrees Celsius (1.8-5.4F) as the immediate response to a doubling of carbon concentrations, known as the transient climate response.
The UN panel also estimated that a doubling of carbon dioxide, after accounting for melting of ice and absorption by the oceans that it would cause over hundreds of years, would eventually lead to a temperature rise of between two and 4.5 C (3.6-8.1F).
Findings in the new study, by experts in Britain, the United States, Canada, Australia, France, Germany, Switzerland and Norway, broadly matched that range for the long-term response.
But for government policy makers “the transient response over the next 50-100 years is what matters,” lead author Alexander Otto of Oxford University said in a statement.
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Gold fell for a seventh straight session on Friday, its longest losing streak in four years, as speculation that the Federal Reserve may soon rein in monetary easing lifted the dollar.
Dollar strength stunted a brief rally in gold prices late on Thursday after a batch of soft US data, putting the metal on track to fall 5 percent this week, the most in four weeks.
Spot gold hit a four-month low at USD 1,367.76 and was down 0.7 percent at USD 1,376.00 an ounce at 1344 GMT. US gold futures for June delivery were down USD 13.60 an ounce at USD 1,373.30.
The dollar rose, hitting a near three-year high against a currency basket, helped by comments from San Francisco Fed chief John Williams on Thursday the bank could begin easing up on stimulus this summer.
“If we look at the dollar index from May 8, it has jumped by 3 percent, which goes hand in hand with news about QE and the economic situation in the United States,” Natixis analyst Bernard Dahdah said.
“We are in a situation where (gold) is driven by investor sentiment in the United States,” he added. “They are maybe liquidating their gold holdings in ETPs because they want to put their money in equities.”
Consumer spending is likely to pick up this year, while government spending declines at a faster rate, according to a survey of business economists.
The economists predict that the US economy will grow 2.4 percent this year and 3 percent next year. That`s unchanged from their forecast in February.
But they are more bullish on consumer spending and housing than they were three months ago, in part because of a more positive view about unemployment.
The survey was released Monday by the National Association for Business Economics, which periodically surveys economists for banks, manufacturers and universities.
The 49 economists who were questioned between April 16 and April 30 predicted that consumer spending will rise 2.3 percent this year, up from a forecast of 1.9 percent in February. They were also more upbeat about auto sales, predicting 15.4 million vehicles sales, an increase of 1 million over 2012.
Nayantara Hensel, chair of the NABE survey and a business professor at National Defense University, said consumer spending will get a boost from gains in the stock market, home values and lower unemployment.
“Home prices are going up, and with also the improvement in the unemployment rate, people will be more willing to buy,” Hensel said in an interview.
The economists predicted that home prices will rise 4.4 percent this year and 4 percent next year. Boosted by new construction, they predict a 15 percent jump in residential housing investment this year.
The average US price of a gallon of gasoline has jumped 11 cents over the past two weeks.
The Lundberg Survey of fuel prices released Sunday says the price of a gallon of regular is USD 3.66. Midgrade costs an average of USD 3.84 a gallon, and premium is USD 3.98.
Diesel held steady at USD 3.93 gallon.
Of the cities surveyed in the lower 48 states, Tucson, Ariz., has the nation`s lowest average price for gas at USD 3.18. Minneapolis has the highest at USD 4.27.
In California, the lowest average price was USD 3.94 in Fresno. The highest was in San Francisco at USD 4.07. The average statewide for a gallon of regular was USD 4.03, up 18 cents.