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NEW DELHI: Traders booked profits in gold and silver as improved domestic factory output raised hopes of a swift economic recovery, making bullion counters unattractive.
India’s factory activity grew for the first time in five months with indicators such as power and fuel demand, railway freight and mobility indices also showing improvement. The US also reported strong manufacturing activity data.
Gold futures on MCX were down 0.34 per cent or Rs 175 at Rs 51,387 per 10 grams. Silver futures dipped 1.15 per cent or Rs 812 to Rs 70,078 per kg.
Gold price rose by Rs 418 to Rs 52,963 per 10 grams in the national capital on Tuesday following a rally in the yellow metal in the international market, according to HDFC Securities. Silver also attracted heavy buying interest as it jumped Rs 2,246 to Rs 72,793 per kilogram.
Globally, gold prices slipped as the dollar rebounded after robust U.S. manufacturing data bolstered hopes around global economic recovery, tempering the safe-haven bullion’s allure.
Spot gold fell 0.3 per cent to $1,964.75 per ounce by 0251 GMT, after hitting its highest since Aug. 19 at $1,991.91 on Tuesday. U.S. gold futures dropped 0.4 per cent to $1,971.80.
Fed Governor Lael Brainard on Tuesday said the U.S. central bank would need to roll out more stimulus to fulfil its new promise of stronger job growth and higher inflation.
Low interest rates reduce the opportunity cost of holding non-yielding bullion, which is also viewed as a hedge against inflation and currency debasement.
Spot gold may fall to $1,938, following its failure to break a resistance at $1,996 per ounce, said Reuters technical analysts Wang Tao.
Elsewhere, silver dipped 0.2 per cent to $28.11 per ounce, platinum eased 0.3 per cent to $937.87, and palladium fell 0.5 per cent to $2,260.56.