On Monday, gold fell to a two-week low as investors sold the metal to cover up the losses occurred in equities and other markets which fell on speculation that the European debt crisis is worsening.
The decline in the euro and other major currencies and resulting strength in the dollar have tempered gold in the past two weeks as bullion becomes more expensive to non-U.S. buyers.
At the Multi Commodity Exchange, gold for delivery in October opened at Rs 27,820 per 10 grams, and was trading in the range of Rs 27,874 – Rs 27,876 per 10 grams around 10:55 am IST.
Similarly, the metal for April contract delivery opened high at Rs 28,852 per 10 grams, then started declining and was trading in the range of Rs 28,670 – Rs 28,734 per 10 grams.
According to some experts, gold might face short-term headwind, but its long-term appeal remains as wedding and festive season is still active in India.