Gold futures ended with losses of Rs 384 per 10 grams as traders booked profits on Thursday, while silver futures rose Rs 328 per kg. Meanwhile, international prices of gold hit their five-month lows in the previous session on fears that the Federal Reserve could hold on to a higher interest rate regime for much longer than anticipated.
"The US economy is far from slowing down as Housing stats rose 3.9%, industrial production grew by 1% and Manufacturing production advanced by 0.5% during the month of July. The dollar index rallied to two month high of 103.59 on Thursday as it becomes evident from the recent data that the Fed will continue to go with higher for longer interest rates which will further fuel a rally in the dollar index to test resistance of 104 in coming sessions," Mohammed Imran, Research Analyst at Sharekhan said.
The decline in gold has reached an oversold condition, which may lead to an increase in short-covering risk at this juncture, Reuters reported quoting Kelvin Wong, Senior Market Analyst, Asia Pacific, OANDA.