European countries entered into a new treaty to form an integration to stem down nation's debt crisis. But news was not enough to please investors who expected a better solution as no clear picture was presented.
Rising concerns from the euro zone has lifted up dollar against the basket of currencies. Rupee-vs-dollar ratio has also widened up. On Tuesday, the partially convertible Indian Rupee touched a record low of 53.49 against the greenback in early session on the foreign exchange markets.
The rise in dollar has made the landed cost of the yellow metal more expensive, which is driving down the physical demand.
On the Multi Commodity Exchange, gold for February delivery contract opened at Rs 28,810 per 10 grams and was seen trading at Rs 28,829 – Rs 28,830 per 10 grams at 12:20 pm IST.
On domestic front, the spot gold declined further; 24 carat gold fell to Rs 28,890 per 10 grams and 22 carat gold to Rs 27,020 per 10 grams.
US spot gold also declined, it was seen trading in the range of $1,653 - $1,654 a troy ounce.