Gold drops on weak demand, global cues; silver extends gains

In worldwide trade, gold pulled back modestly, taking a breather after rallying to a three-weeks high

Gold prices dropped after a three-day rally at the domestic bullion market here, due to reduced buying by stockists and retailers amidst sluggish foreign sentiment.

In contrast, silver firmed up further, owing to higher industrial offtake.

Standard gold (99.5 purity) shed by Rs 90 to conclude at Rs 27,090 per 10g from the overnight closing level of Rs 27,180.

Pure gold (99.9 purity) also went down by a similar margin to settle at Rs 27,240 per 10g from Rs 27,330 previously.

Silver (.999 fineness), however moved up by Rs 25 to end at Rs 37,770 per kg compared to Rs 37,745 on Tuesday.

In worlwide trade, the yellow-metal pulled back modestly, taking a breather after rallying to a three-weeks high, amid investors caution ahead of the US Federal Reserve's December meeting minutes release later in the day.

Meanwhile, safe-haven demand in the midst of global economic worries amid uncertainty over Greece's future in the euro zone and sliding equities, capped the fall.

Spot gold was substantially higher at $1,209.00 an ounce in early European trading.