Gold prices are crashing these days in India, especially in the wake of major fall in precious metals in the overseas markets.

On Thursday, gold came down to touch nearly five-month low levels as there were heavy selling by major market players. Gold lost Rs120 to end at Rs 8,940 per 10 gram.

Traders said a number of major players are off-loading bulk stocks of gold in the domestic market, which placed the metal at a level last seen on 8 January.

"The weakening in gold is continuing as the market is experiencing panic selling from stockists during this off marriage and festival season," said Arindam Gupta, a bullion trader in Mumbai.

Also, there have been reports of a major fall in precious metals in the overseas markets last evening, which normally set price trend in domestic markets.

The gold in Asia touched a five-week low level of $659 (Rs 26,883) an ounce.

Standard gold and ornaments fell by another Rs 120 each at Rs 8,940 and Rs 8,790 per 10 gram respectively. Sovereign was also down by Rs 50 at Rs 7,550 per piece of eight gram.

Silver ready plunged by Rs 400 at Rs 18,000 per kilo as stockists joined the general weak trend. Silver weekly-based delivery dropped by Rs 435 at Rs 18,000 per kilo on reduced off-take by stockists.

Silver coins lost Rs 100 at Rs 23,900 for buying and Rs 24,000 for selling of 100 pieces.

Meanwhile, a report from the World Gold Council said the demand for the yellow metal rose 4 per cent in the first quarter of this year as steady prices sparked purchases from Vietnam, China and India.

"Global demand increased to 832 metric tons from 798 tons a year earlier," the council said in a statement.

It said purchases for jewelry jumped 17 per cent to 573 tons as consumers grew more comfortable with gold above $650 (Rs 26,494) an ounce.