Gold futures down on weak global cues, subdued domestic demand

Gold prices fell 0.90% to Rs 25,447 per 10 grams in futures trade today, on increased offloading of positions by participants taking cues from the global market.

Besides a subdued demand in the spot market, where the precious metal dipped to a 20-month, low also weighed on the prices.

At the Multi Commodity Exchange, the June contract eased by Rs 232, or 0.90%, to Rs 25,447 per 10 gm in business turnover of 3,383 lots.

The August contract shed Rs 221, or 0.85%, to Rs 25,886 per 10 gm in 115 lots.

In the spot markets, gold prices dropped to Rs 26,350 per 10 grams, its lowest level since August 17, 2011 in the national capital. Prices have dropped by Rs 3,250 in the last four days.

Analysts said a weak trend in the overseas markets on speculation central banks in Europe may sell holdings to raise funds and that a US recovery would curb demand for the metal as a protection of wealth, mainly weighed on the gold prices at futures trade here.

Globally, gold fell 2.8% to $1,337.86 an ounce in Singapore today.