Gold prices in India declined on the Multi Commodity Exchange (MCX) Thursday tracking weakness in the international spot prices as the US dollar gained.

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At 11:55 am, gold futures for February delivery fell 0.41 percent to Rs 48,664 per 10 grams as against the previous close of Rs 48,865 and opening price of Rs 48,700 on the MCX. Silver futures traded 1.12 percent lower at Rs 65,790 per kg. The prices opened at Rs 66,000 as compared to the previous close of Rs 66,536 per kg.

“Gold prices have correcting recently and this trend continued today. The short-term bias looks negative due to a rebound in US dollar which hovered close to a more than one-week high,” said Amit Sajeja, VP Research - Commodities & Currencies at Motilal Oswal.

International gold slipped on Thursday as investors flocked to the safety of the dollar after an equity sell-off, while the US Federal Reserve flagging concerns around the pace of the recovery in the world's largest economy lent further support to the greenback, a Reuters report said.

Spot gold eased 0.3 percent to $1,837.67 per ounce. Prices had fallen to their lowest since January 18 at $1,830.80 on Wednesday. US gold futures shed 0.6 percent to $1,833.70.

The Fed kept its key interest rates and monthly bond purchases unchanged and said the pace of the recovery in US economic activity and employment had moderated in recent months.

However, Fed Chairman Jerome Powell said the risks are in the near term as the vaccine program ramps up and new variants threaten to spread more quickly, and there is good evidence to support a stronger economy in the second half of this year.

Meanwhile, global demand for gold fell to its lowest in 11 years in 2020 as the coronavirus upended the market, triggering huge stockpiling by investors but collapsing sales of jewellery and purchases by central banks, the World Gold Council (WGC) said in its latest quarterly report.

On the domestic front, India’s gold consumption is expected to rebound in 2021 after falling to its lowest in 26 years last year as pent-up demand and higher economic growth are seen boosting sales, the World Gold Council (WGC) said on Thursday.

“Bullion look weak in the morning session as the US dollar gained. However, stimulus hopes and rising coronavirus infection cases may lend support to gold prices,” said Ajay Kedia, director, Kedia Commodity Comtrade.

According to Kedia, gold may find support at Rs 48,380 level, while resistance is placed at Rs 49,000 level. Silver also looks weak tracking base metals, he said. Silver can see support at Rs 64,800 level, while resistance is placed at Rs 67,200 level.

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