Lack of support even at lower levels has led to gold dropping over the last few trading sessions. International drop in prices has led to a domestic fall. Globally, investors were worried that the fiscal cliff crisis in the US, if unresolved, could lead to a correction.
However, there are a section of analysts who believe that should the fiscal cliff not be resolved, gold prices would rise, as investors would hide behind the precious metal.
Trading is likely to be thin this week and the real action in gold is likely to shift the next year, when a clear trend is likely to emerge for the metal.
Last week gold came off four month lows, hitting $1654 an ounce and investors dumped the metal. Analysts also believe that the metal should continue trading soft if there is a sharp rally in equities across the globe.
Meanwhile, Silver was also trading soft on the MCX with the Silver for March delivery dropping to Rs 57,523, a drop of Rs 206.
The metal seems to be tracking the prices of gold and is likely to move in tandem with the precious metal.