Gold prices Tuesday plunged ₹600 to ₹34,870 per 10 gram in bullion market here, tracking weak global trends amid a strong dollar and easing demand from local jewellers.

Globally, spot gold was trading lower at $1,394.39 an ounce, while silver was down at $15.08 per ounce in New York.

“Spot gold ticked lower, held below $1,400 an ounce, due to a strong dollar which rallied to a three-week high. Reduced expectations of an imminent U.S. interest rate cut supported the dollar,” Hareesh V., Head Commodity Research, Geojit Financial Services said.

“Weak demand expectation from the world’s second top consumer, India, due to a hike in duty also weighed down the sentiments. However, feeble global equities restricted major downside in the counter,” he said.

Last week, in the Union Budget for 2019-20, the government proposed to increase customs duty on gold and other precious metals to 12.5% from current 10%.

Expectations that the U.S. Federal Reserve will soon cut interest rates was one of the reasons behind gold’s recent spike to a six-year highs. However, strong gains in U.S. employment data have cast doubt on Fed’s rate cut expectation, Mr. Hareesh said.

According to the All India Sarafa Association, gold of 99.9% and 99.5% purity plummeted ₹600 each to ₹34,870 per 10 gram and ₹34,700 per 10 gram, respectively, in the national capital.

Sovereign gold, however, held steady at ₹27,300 per eight gram.

Meanwhile, silver ready declined by ₹48 to ₹38,900 per kg and weekly-based delivery slumped ₹93 to ₹38,000 per kg due to reduced offtake by industrial units.

Prices of silver coins held flat at ₹81,000 for buying and ₹82,000 for selling of 100 pieces.