The second auction tomorrow by Bank of England (BOE) in the UK of 25 tonne of gold may attract healthy demand, given the current low price levels of $269-70 per troy oz. However, overall price impact is feared to be marginal. Reportedly, this is the sixth and final sale in the current series as part of its restructuring of official reserves.

``The downside in gold prices is limited and it can't stay here for long,'' said a gold analyst at a leading foreign bank. ``If the metal is able to sustain the current levels and inch up marginally tommorrow, we hope to see the prices reach the next stop at $278-9 levels.''

Global stock slide and lowered import duty by India should hopefully see higher demand for gold in India, bullion analysts feel.

``The monthly demand could go up to healthy levels of around 40-45 tn,'' said Ashish Ghiya, gold analyst at ICICI. ``The overall investment demand is unlikely to be dampened''.

Surprisingly, in India, the lowered import duty (on February 28) is seen as a factor that may push up gold imports in the country. However, currently, in Mumbai and Delhi's bullion markets, gold prices fell sharply on Tuesday on the emergence of selling by stockists influenced by lower overseas advices and closed Rs 50 lower at Rs 4,350 per ten gram. The fall in gold prices was said to be mainly due to slide in its prices in international markets.

In thin trading, the gold prices had dipped to around $270 an ounce against yesterday's $273.20. Both the precious metals resumed weak and continued to lean down on increased selling and closed with notable losses. In Mumbai, standard gold started on a subdued note at Rs 4,330 and dropped further to end at Rs 4,320, showing a sharp fall of Rs 20 over yesterday's close of Rs 4,340. 22-carat gold was nominally quoted weak at Rs 3,995 as against the previous day's close of Rs 4,015. The ten-tola gold bar (.999 purity) fell sharply by Rs 250 to Rs 50,600 from the last close of Rs 50,850. Currently, in the international market, the gold prices are subdued, primarily because of sharp jump in lease rates to more than six per cent from 2.01 per cent at the beginning of the week. This has made the shorts a bit costlier, forcing the traders to go slow on shorting the metal. The overall short position too has declined sharply, giving hope of an upward move of the otherwise dallying yellow metal.