Gold and dollar share an inverse relationship with each other and the recent rise in dollar has weighed on gold. Stronger dollar pressures prices of dollar-denominated commodities, such as gold.
Gold futures for October contract on Multi Commodity Exchange was seen trading at Rs 31,025 per 10 grams, lower by 0.03% at 02.00 pm IST. Spot bullion on the MCX was seen lower at Rs 31,023 per 10 grams.
MCX silver futures slipped by Rs 219 per kg, and was trading at Rs 62,715 per kg.
Investors were worried over the rising debt costs to Spain and the country's refusal to seek a bailout. Overseas gold trading at $ 1,775 an ounce.
Globally, investors are parking surplus to the dollar due to rising fears about the future of the euro zone.
Deutsche Bank raised its 2013 price outlook for gold by 3% to $2,113 per ounce, stating that U.S. central bank intervention and provision of further liquidity is unambiguously bullish for the precious metals sector, as per Reuters report.