Gold tends to gain when interest rates are low, which reduces the opportunity cost of holding non-yielding bullion. Gold is also seen as a hedge against inflation.
Gold futures on MCX were down 0.16 per cent or Rs 83 at Rs 52,508 per 10 grams. Silver futures dropped 0.07 per cent or Rs 47 to Rs 64,957 per kg.
Gold prices in the national capital witnessed a fall after rising for the past seven days and declined Rs 187 to Rs 52,846 per 10 gram, in tandem with weak international trends, according to HDFC Securities. Silver also tumbled Rs 1,933 to Rs 64,297 per kg.
Globally, gold prices steadied on Wednesday as worries over rising cases of COVID-19 and expectations of possible inflation from more stimulus measures underpinned the metal, while investors awaited the US Federal Reserve’s meeting outcome later in the day.
Spot gold was little changed at $1,957.84 per ounce by 0049 GMT. Prices hit an all-time of $1,980.57 on Tuesday before retreating after investors booked profits and the dollar regained some ground. U.S. gold futures rose 0.5 per cent to $1,954.50.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.7 per cent to 1,243.12 tonnes on Tuesday.
Silver dropped 1.1 per cent to $24.31 per ounce, platinum fell 0.1 per cent to $947.29 and palladium slipped 1.1 per cent to $2,259.52.
