Multi Commodity Exchange (MCX) gold futures for February delivery opened at Rs 27,674 per 10 grams and was seen trading at Rs 27,670 – Rs 27,673 per 10 grams at 12:30 pm IST.
MCX spot gold declined to Rs 27,550 per 10 grams.
Investors cashed out from the yellow metal despite European Central Bank's (ECB) efforts to fund major European banks. The move failed to impress bullion traders as doubts floated on their minds whether this step will be enough to ease the region's debt crisis.
The ECB offered emergency three-year loans worth 489 billion euros to 523 European banks at the interest rate of 1%. This is the cheapest funding provided to the European banks to stem the debt crisis.
The metal lost its grounds in overseas market and same trend was visible in most of the Asian markets too. US spot gold was seen trading at US $1,603.50 a troy ounce.