Gold dropped on Wednesday as physical buying, investors sold contracts to allocate profits from the escalation of the previous session that took prices to a maximum of two months. While a drop in equity markets on back of renewed concerns over Iraq caused other investors to take advantage of the profits.
Spot gold fell 0.4 percent to $ 1312.05 an ounce at 0944 GMT, while U.S. gold futures for delivery in August fell $ 8.70 to $ 1312.60 an ounce.
At the Multi Commodity Exchange, gold for delivery in August declined by Rs 94, or 0.34 per cent, to Rs 27,637 per ten gram. While, silver for delivery in September fell further by Rs 300, or 0.67%, to Rs 44,703 per kg.
On U.S. Silver for September delivery shed 0.92%, or 19.4 cents, to trade at $20.90 a troy ounce., compared to maximum of three months of $ 21.14 an ounce yesterday.
Gold jumped to $ 1326.60 on Tuesday, its highest level since April 15, before paring gains to close at $ 1321.30, up 0.22%, or $ 2.90.
A spot gold price was down slightly by 0.4 percent in the trading session morning as the strong U.S. economic data and rising risk appetite in the global markets. Besides weak physical demand kept prices under pressure. However, increasing geopolitical tension in Iraq and row between Russia and Ukraine upsurge in demand for safe haven. In addition, the Federal Reserve cut its forecast for economic growth, indicating that the lowest interest rate may stay for quite some time muted sharp decline in prices.
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