Gold and silver prices continued to trade close to their lowest level in five years in Asia trade amid rising expectations that the U.S. Federal Reserve will raise interest rates later this year. Gold dipped below $1,100 an ounce in early Asia hours and quickly regained on bargain hunting. It is trading at $1,104.08/oz.

“I think there is still going to be a little bit of pressure,” said Victor Thianpiriya, a commodity strategist at ANZ Bank. “Prices could head lower.”

In India, gold is likely to fall below Rs 25,000 per 10 gm, and possibly sell in the range of Rs 20,500-24,000 per 10 gm if the US Fed raises dollar interest rates this year, a research analyst from India Ratings.

Gold prices plunged to as much as 4 percent to their lowest in the more than five years as sellers in top consumer China has offloaded the metal. China has dumped a huge amount of gold on the market, resulting in the sharp decline in the value of the yellow metal. It was also hit by the news that China`s official gold reserves have risen to almost 60 percent over the past six years, according to the first official data on the subject since 2009.

By Premji