Gold prices dropped by nearly 1 per cent as weak global cues impacted sentiments. On the MCX, Gold for December Futures delivery was down Rs 49,050 on Tuesday, a cut of nearly 1 per cent over Monday's closing.
The weak sentiments were largely on account of hopes of a covid vaccine and a recovery in economic activities across the globe.
Spot gold in India is expected to drop when markets open later. Jewellery shops are likely to show a drop in gold prices, mirroring a weak global trend.
Spot gold in the international market fell as much as 0.1% to $1,834 per ounce after falling as much as 2.2% on Monday.
Most analysts expect gold to continue to weaken as economic recovery and vaccine hopes ease worries over Covid-19 infections. Stock markets across the globe including the Indian markets are hitting record highs and the trend is unlikely to change anytime soon. This may put pressure on gold prices going forward. Physical demand for gold has also been weak, though gold ETFs have seen robust buying.
It's likely that gold would continue to dip, though a large scale fall would be a buying opportunity. At the moment all asset classes are looking up.