Indian gold prices, which largely move in tandem with prices in the international market declined sharply by this week.
In the global markets, gold prices saw their weekly decline, falling by almost 4.5 per cent.
How gold prices moved this week?
In India, gold scaled a peak of almost Rs 54,500 for 22 karats, before settling at Rs 51,200 per grams. This week, gold prices fell as treasury yields rallied and the US stimulus bill was nowhere close to an agreement.
Check gold rates in Indian cities here
Indian gold prices would move in sync with international gold prices in the coming week, which again depend on a few factors.
Bullion traders in the international markets are likely to keep an eye on bond yields, as well as the economic stimulus package as both developments could be triggers for international gold prices.
In India, we believe that gold prices could hover around the $2,000 per ounce mark, which means Indian gold prices for 22 karats could be near that Rs 51,000 to 52,000 levels.
Given the weakness in the global economy and huge inflows into gold ETFs, the precious metal may continue to find support. Apart from this, low interest rates and easy monetary policy around the globe would ensure that gold prices do not fall dramatically.
For investors the simple strategy would now be "a buy on decline" strategy. It is highly unlikely that we would see a dramatic fall in the prices of the precious metal anytime soon.