Gold prices tumbled on Thursday, extending losses for the second consecutive session on the back of growing worries over interest rate hike in the US.
The yellow metal prices fell sharply by Rs 200 to Rs 25,350 at the bullion market, tracking weakness in the metal prices in overseas markets.
International gold prices slumped to over five year-low after the comments from US Federal Reserve chairperson Janet Yellen strengthened expectations of monetary tightening as early as this month.
"The U.S. Federal Reserve holds its next policy meeting on Dec. 15-16. A U.S. payrolls report on Friday (4th Dec'15) will be even more closely watched than usual. A strong number, after a surge in job growth in October, could cement expectations that the Fed will deliver its first hike in almost a decade," said Angel Broking in a note.
Gold prices in overseas markets fell to $1,045.85 an ounce, touching the lowest level since February 2010.
"From a month's perspective, the metal ($1052/ounce) faces selling pressure in the medium to long term due to the looming U.S. rate hike and could drop to $1,000 if the Fed raises rates in December, while MCX gold Feb contract prices (CMP:Rs.24981) might possibly head lower towards Rs.24000/10 gms mark," it added.
Silver prices also slumped by Rs 450 to Rs 33,700 per kg tracking weakness in gold prices.
