Gold snaps 3-day rising trend, down Rs 220 on sluggish demand

The yellow-metal had gained Rs 350 in last three days.

Silver also declined by Rs 600 to Rs 57,400 per kg on reduced offtake by industrial units.

Traders said sluggish demand at prevailing higher levels and investors shifting their funds from weakening bullion to rising equities mainly kept pressure on both gold and silver prices.

They said a weak trend in overseas markets as optimism that the US economy is recovering and lawmakers will reach a budget deal damped demand for the metal as a protection of wealth further influenced the sentiment.

The gold in global markets, which normally set price trend on the domestic front, fell 0.4 per cent to USD 1,651.62 an ounce in Singapore.

On the domestic front, gold of 99.9 and 99.5 per cent purity fell Rs 220 each to Rs 31,000 and Rs 30,800 per 10 gm, respectively. Sovereign remained steady at Rs 25,450 per piece of eight gram in limited deals.

In line with a general weak trend, silver ready dropped by Rs 600 to Rs 57,400 per kg and weekly-based delivery by Rs 1885 to Rs 57,615 per kg.

However, silver coins continued to be asked around previous level of Rs 79,000 for buying and Rs 80,000 for selling of 100 pieces on lack of buying support at existing higher levels.