In New Delhi, prices of 22-carat gold slumped Rs 3,200 to Rs 50,250 per 10 gram while prices of 24-carat also dropped to Rs 54,500. Gold prices
in the national had declined Rs 650 to Rs 53,450 per 10 grams on Tuesday in line with a drop in international prices of the precious metal and a rupee appreciation, according to HDFC Securities. In Chennai, the rate for 22-carat was Rs 50,130 while for 24-carat it was Rs 54,680. In Mumbai, 10 gram 22-carat was retailing at Rs 51,400, according to Good Returns website.
On MCX, gold futures rose 0.68% to Rs 52,280 per 10 grams while silver futures climbed maginally to Rs 66,976 per kg against previous close of Rs 66,347.
Multi Commodity Exchange of India on Wednesday said it will launch a liquidity enhancement scheme in the newly launched segment 'options on goods' with gold mini contract.
The liquidity enhancement scheme, popularly known as market making, will start from September 1, MCX said in a circular.
"The Exchange, based on a competitive bidding process, will appoint the lowest (qualified) bidder in terms of 'bid incentive amount' as a single designated market maker for the product till the scheme remains in force. The maximum incentive bid amount is Rs 40 lakh per month, the exchange circular added.
In the international market, gold recovered after dipping below the key $1,900 level at one point on Wednesday and registering its worst fall in seven years in the last session as bleak economic data underscored concerns over a pandemic-led slowdown.
Spot gold climbed 1.8% to $1,945.27 per ounce, having dipped as much as 2.5% earlier. US gold futures rose 0.4% to $1,954.30.
On Tuesday, gold crashed as much as 6.2% in its worst one-day fall since April 2013, while silver slumped 15%, its biggest decline since October 2008, and was now 4.2% higher at $25.83.
"That decline was a healthy correction, it allows more people to get in, so prices will rally again and by the end of the year we'll see new all-time highs with gold at $2,500 per ounce and silver at $35," said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.
"We have all the same fundamental factors that supports gold... the US Federal Reserve
is going to remain dovish for an extended period of time, they have already said that they will allow inflation to rise above their targets."
Large stimulus measures tend to support gold, which is often considered a hedge against inflation.