Gold futures for immediate delivery on Multi Commodity Exchange lost Rs 166 at Rs 28,078 per 10 grams. It had touched intraday low of Rs 27,992. while Gold for August delivery was lower by Rs 167 at Rs 28,077 per 10 grams at 2.40 pm IST.

Europe has played a key role in driving prices down at this level. Lingering debt crisis in the euro zone is one of the main reasons for the drop in gold and silver prices. Traders are offloading their positions on rising concerns about the political health of the euro zone.

Investors are skeptical over recovery of the euro zone debt crisis. Euro has slipped sharply against the US dollar and the basket of currencies.

Domestically, gold price fell due to sluggish demand for physical gold. Gold of 99.9 and 99.5% purity rose to Rs 28,520 and Rs 28,380 per 10 grams, respectively.

International spot gold price was seen at $1,558 an ounce.

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