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Gold futures prices today slipped below the Rs 33,000-mark by falling 2.60% to Rs 32,774 per 10 grams as speculators reduced their exposures after commodity market regulator FMC raised the initial margin in a bid to curb volatility in the precious metal.
Besides, a weakening trend at the spot market as demand declined at prevailing levels and a weakening trend overseas, put pressure on gold prices.
The increased rate of margin will be effective from September 2.
At the Multi Commodity Exchange, gold for delivery in October dipped below Rs 33,000 level by falling Rs 876, or 2.60%, to Rs 32,774 per kg in a turnover of 16,082 lots.
Similarly, gold for delivery in far-month December lost Rs 721, or 2.14%, to Rs 32,910 per 10 grams in business turnover of 1,384 lots.
Market analysts said the Forward Markets Commission's (FMC) decision to raise initial margin to 5% on the value of contract from 4% in a bid to curb volatility mainly helped in bringing down the gold futures prices.
In view of the current price volatility, the Commission has also decided to impose additional margin of 5% on all the gold.
Besides, a weakening trend in the global market as the US economic data reinforced the case for the Federal Reserve to slow stimulus measures, reducing the appeal of the precious metal as a hedge against inflation, too, put pressure on prices, they said.
"Offloading of positions by speculators after FMC raised margin, mainly led to the fall in gold futures prices," said Rakesh Anand, an analyst.
Globally, gold dropped by $13.80, or 0.98%, to $1,393.40 an ounce in Singapore.
In the national market, gold prices fell by Rs 625 to Rs 31,700 per 10 grams.
