Gold prices in India continued their downtrend to close marginally lower at ₹25,250 per 10 gm against ₹25,255 registered on Saturday. Pure gold (of .999 purity) was down at ₹25,400 (₹25,405) per 10 gm.

Globally, gold prices slipped for the sixth consecutive session and tumbled to a five-year low of $1,104 per troy ounce (at 10-39 European time) as the dollar strengthened on expectations of the US Federal Reserve hiking interest rates later this year.

The continuous fall in gold prices in the last few days attracted some buying at the lower level though there are no auspicious occasions or festival demand round the corner. Jewellers, who used to pay premium for sourcing gold, are getting it at discount. However, the rate of discount has fallen to $1 an ounce from $9 two weeks ago. The premium on gold was $18-20 an ounce three months ago.

Ajay Kumar Kedia of Kedia Commodity Comtrade said the discount on gold offered to wholesale buyers has shrunk after buying interest kicked in at lower levels.

Globally, he said, the fall in gold price may stabilise with the US giving a clear indication on its lending rate and the crisis in Greece settling. There are also indications that the Euro Zone economy is showing signs of revival while the Chinese economy has stabilised, he added. The latest drop in the gold price was also affected by Chinese investors selling gold.

Deep N Mukherjee, Research Analyst, India Ratings, said Indian gold prices may range between ₹20,500 and ₹24,000 per 10 gm if the US interest rate hike actually occurs in FY16 leading to the dollar appreciating against the rupee.

In MCX, gold for August delivery fell by ₹524 per 10 gm to ₹24,975 while the October contract was down by ₹519 at ₹25,200 per 10 gm, in a clear indication of a bearish trend in the Indian market.

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