Gold futures fell more than Rs 1000 in past two days, the steepest fall ever over the expectations that Fed Chairman Ben Bernanke will response to the rapid deterioration in the health of US economy.
Analysts said it was time for gold investors to take money off the table after the rally extended too far, too fast in recent weeks.
But counter-beliefs from several investors that Fed may not take further round of QE aided gold to turn back to its rally again over its safe-haven demand.
The most traded commodity gold for October delivery on MCX which opened at Rs 26,451 per 10 grams was trading between Rs 26,545 – Rs 26,548 per 10 grams around 11:57 am IST.
Gold for delivery in far-month April which opened low at Rs 26,801 per 10 grams. It was trading in the range of Rs 27,346 – Rs 27,368 per 10 grams same time.
Some investors are buying gold on the belief that it holds its value well when the outlook for other assets is less rosy.
Gold also took a turnaround after US equity indices fell during August 25 trade.
Equities and gold have moved in opposite directions for much of this month, as investor appetite for risk dominated trading across assets.
Some of the investors are squaring of their positions in today's trade to have a neutral position so as to kick-start a new stance from Monday after the speech of Fed chairman.