Gold prices fall Rs 600 to Rs 77,700; silver tumbles Rs 2,800

New Delhi: Gold prices depreciated for the second straight day by Rs 600 to Rs 77,700 per 10 grams in the national capital on Wednesday amid muted domestic demand.

On Tuesday, the precious metal closed at Rs 78,300 per 10 grams.

Silver also tumbled Rs 2,800 to Rs 91,200 per kg against Rs 94,000 per kg in the previous close, according to the All India Sarafa Association.

Meanwhile, gold of 99.5 per cent purity plunged Rs 600 to Rs 77,300 per 10 grams.

Traders said muted demand in the domestic demand led to the fall in prices of the yellow metal.

In futures trade on the Multi Commodity Exchange (MCX), gold contracts for December delivery rose Rs 29 or 0.04 per cent to Rs 75,190 per 10 grams.

Silver contracts for December delivery also soared Rs 754 or 0.85 per cent to Rs 89,483 per kg on the exchange.

In the Asian trading hours, Comex futures slipped 0.03 per cent to USD 2,634.50 per ounce.

"Gold prices continued to decline on Wednesday due to a decrease in the safe haven premium, and chances of the US Federal Reserve easing the rate more aggressively declined," Saumil Gandhi, Senior Analyst of Commodities at HDFC Securities, said.

However, silver quoted 0.75 per cent higher at USD 30.83 per ounce in the international markets.

Gold and silver saw a sharp sell-off following reports that Hezbollah is seeking a ceasefire discussion with Israel, leading market participants to anticipate potential de-escalation in the Middle East and book profits on their long positions, Rahul Kalantri, VP Commodities, Mehta Equities Ltd, said.

According to Praveen Singh, Associate VP of Fundamental Currencies and Commodities at Sharekhan by BNP Paribas, gold may see some recovery later in the day in the wake of the upcoming US CPI inflation data. However, the upside is likely to be capped unless geopolitical tensions flare up further or the US yields dip significantly.