Gold prices are estimated to decline further to Rs 23,000 per 10 grams in the next 30 days amid intensifying worries over interest rate hike by the US central bank in September.
The yellow metal prices remain under pressure as the meeting of US Federal Reserve on 29 July is highly anticipated to send signals on rate increases.
"The gold remains bearish and the prices are likely to decline to ₹ 23,000-23,500 per 10 grams in a week to month time," Commtrendz Research Director Gnanasekar Thiagarajan told PTI.
"This is mainly because the market is nervous of the outcome before July 29, when the US Federal Reserve will take a decision on rate hike. Whatever the decision, it will be negative for gold."
Trading at its lowest levels since 2010, gold closed at Rs 24,752 on Saturday on the Multi Commodity Exchange (MCX).
The prices have fallen by over 27% in the past nine months, declining from a high of Rs 34,000 per 10 grams.
Volatility in gold prices is expected to continue untill there is clarity over quantum and timing of policy rate hikes by the US central bank.
"At MCX also, the close below ₹ 25700/10gms has put the bears in the front row, where in the immediate short run ₹ 24400/10gms can offer some support, but over the intermediate term the targets of ₹ 22600-22500/10gms look imminent," Sugandha Sachdeva, Head-Metals Energy & Currency Research, Religare, told moneycontrol.com.
Gold prices in the international markets also stay weak at just below $1,100 per ounce. Analysts estimate the precious metal prices to plummet to $1,000 easily in the coming months.
Besides strong dollar, the metal prices are hit by its losing sheen as a safe-haven asset. Recent crisis in Greece and a crash in Chinese equity markets had failed to boost gold prices despite its safe-haven appeal.
"I think we see more of a downtrend particularly over the next couple of months ahead of the market speculation of a September rate hike in the U.S., so I think you can easily see prices over the next two months breaching below $1,000 round level," David Wilson, director of metals research and strategy at Citi, told CNBC.
