| In Mumbai, standard gold today closed at Rs 8,650 per 10 gm, while pure gold slumped by Rs 240 to end the day at Rs 8,700 per 10 gm. |
| Meanwhile, spot gold hit an intraday low of $573.70 an ounce, matching the fall in New York, before recovering to touch the day's high at $577.40. |
| "Today's decline is just a reaction to the trend at NYMEX," said Bhargav Vaidya, proprietor of B N Vaidya & Associates. The metal was expected to consolidate now with no major decline foreseen in the near future, but, prices were going to scale $550 levels in the long term, Vaidya added. |
| Since last Thursday when the domestic market ran into a downturn after touching a two-week high at Rs 9,045, prices of the yellow metal could not recover, posting a decline of 4.4 per cent or Rs 305. |
| Traders said the scope for gold's gains was constrained by a firmer dollar and weaker oil prices. |
| Gold's appeal as a hedge against inflation waned because of softening oil prices. The yellow metal also often moves in the opposite direction to the US currency. The dollar, today, edged higher across the board ahead of US data. |
| Oil slumped to around $58 a barrel, taking the week's total loss to over 7 per cent, on forecast of a further rise in bulging US fuel stockpiles, sources said. London Brent crude also dipped to its lowest level this year. |
| Gold has lost over 20 per cent since scaling a 26-year high of $730 in May, when investors diversified their business into base metals. A weaker oil was the main driver behind the recent sell-off. |
| Dealers said current prices might attract investors and physical buyers in key consuming countries. Festival demand in main consumers in Asia would also offer support, they said. |
| According to analysts, demand in India, the world's largest gold consumer, picked up on lower prices and strong festival demand. |
| Experts believe gold sales in this festive season are expected to improve by 25 per cent owing to lower prices. |
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