Gold futures declined by 0.70% to Rs 28,292 per 10 grams in early trade today after the precious metal dipped below the $1,600 an ounce-level in overseas markets as a stronger dollar eroded its appeal as an alternative asset.
In addition, subdued demand for the precious metal in the domestic spot market dampened the gold futures trading sentiment.
At the Multi Commodity exchange, April gold fell by Rs 200, or 0.70%, to Rs 28,292 per 10 grams, with an open interest for 100 lots.
The February delivery lost Rs 196, or 0.70%, to Rs 27,987 per 10 grams, with a trading volume of 1,918 lots.
Analysts said reports of a weakening trend in global markets on concerns that Europe's debt crisis is escalating demand for the dollar eroded the appeal of gold as an investment option, which dampened the trading sentiment in the futures market.
Meanwhile, gold dipped below the $1,600-mark, shedding 0.29% to a seven-week low of $1,571.90 an ounce in Singapore in early trade today. Prices of the precious metal have tumbled by nearly 8% in the past three sessions overseas.
