Bullion dealers said a downtrend in international gold markets had also dampened Indian sentiment.
At the Bombay bullion market, standard gold (24 carat) lost Rs 15 from Rs 5,105 to close at Rs 5,090 per 10 gm yesterday. Silver .999 prices at the local markets were steady at Rs 6,880 per kg, following subdued demand.
Local prices are likely to follow international trends. Trading activity is likely to remain dull this week, Bombay Bullion Association president M L Damani said. Imports will also remain steady, with higher levels being recorded at the Ahmedabad and Delhi markets, he said.
22-carat gold prices were steady at Rs 4,710 per 10 gm yesterday. According to bullion dealers, the collapse at the stock markets is not likely to have an impact on the gold prices.
But marketmen said with imports steady and foreign interests poor, gold prices in Mumbai are expected to move in a narrow range. Gold will attract fresh buying from next week onwards and remain in focus until the Diwali festival, a Mumbai-based gold jeweller said.
With the festive season to set in (over the next two weeks), the demand for gold will improve from mid-October right through to early November.
At the London markets, gold prices edged lower due to light professional selling in early Monday trade. Gold prices could be heading for the low end of its tight $379-$381 per ounce price range, dealers said.
Bullion fixed at $379.60, compared with $380.70 on Friday afternoon and a London close of $380.45. Silver was indicated four cents weaker at $4.87 and trading was slack.
The mood was still bearish, despite golds slight recovery since sinking to 18-month low ($ 377 per ounce) last week, dealers said. Its failure to move out of its range was making the market nervous. Theres a lot of uncertainty about gold as people dont know which way its going to go, a dealer said. People are anxious and certainly not keen to take positions, he added.
In Dubai, re-export gold market prices fell marginally last week and may trigger Indian import demand ahead of the festival season, dealers said.
