On Friday, gold futures on MCX (Multi Commodity Exchange) were trading 0.68 percent or Rs 358 lower at Rs 52,572 per 10 grams at 10 am. So far this week, rates have fallen over Rs 2,000 per 10 grams.
In the international market, spot gold was trading 0.4 percent higher at $1,960.29 per ounce, but was nearly 4 percent down for the week, on track for its first weekly decline since early June.
Gold prices have been seeing significant correction since it made sharp gains to touch new record highs in the domestic and international markets. On 7 August, the last trading day of the previous week, gold futures (October 2020) on MCX closed lower at Rs 54,789 per 10 grams after 6 days of rally. During the day the yellow metal touched a new all-time high of Rs 56,191 per 10 grams and went parabolical towards the end.
Spot gold had hit a record high of $2,072.50 an ounce last week.
While profit booking may have been the main reason for the correction in the precious metal's prices. The US dollar's weakening for a third consecutive session against its rival currencies may have also made import-dependent gold cheaper in India.
However, weak economic data is still supporting the safe-haven appeal of the precious metal globally. This week the UK officially entered recession with a collapse of around 20 percent in its GDP (gross domestic product), the worst contraction in all of Europe.
Further, on Thursday, data out of the US showed jobless claims dropped below one million last week for the first time since the start of the COVID-19 pandemic, although at least 28 million people are still receiving unemployment checks, indicating a weak labour market.