Gold plunges toward $1600 in Asian trade

Gold and Silver prices tumbled on Monday as the dollar gained more strength amid lingering recession fear. Gold for immediate delivery was seen trading at $1609.89 an ounce at 12.00 noon Singapore time after hitting as low as $1604.29 an ounce in early trade. US gold for December delivery was at $1608.41 an ounce on the comex division of Nymex after dropped to a low of $1607.2 an ounce in early trade. Meanwhile silver prices continued their journey towards south as US silver was seen trading at $28.04 an ounce, dropped by nearly seven percent. The bullion suffered a decline of 8.6 per cent last week, its sharpest such drop in more than 28 years as US gold declined to its biggest daily drop in more than five years on Friday. Analysts said the precious yellow metal and Silver are likely to extend losses during the day after greenbacks safe haven appeal increased as it gains more strength against a basket of currencies including euro. The dollar held steady against a basket of currencies, after rallying nearly 6 per cent so far this month as investors fled risky assets to seek safe haven appeal in the greenback On Friday, the CME Group Inc. increased the margin requirements on Gold and silver trading after prices plunged. The minimum cash deposit for gold futures will rise 21% to $11,475 per 100-ounce contract at the close of trading today, while the minimum cash deposit for silver was raised to 15.6% to $24,975.