On Tuesday, gold fell by 1% on worries over an impending fiscal cliff in the US. If the White House and Congress fail to come to conclusion, US economy may slip into recession.
Domestically, MCX gold futures for December 2012 contract, was trading at Rs 31,020 per 10 gram, marginally higher by 0.20%. The metal opened at Rs 31,078, against a previous close of Rs 30,958.
Appreciation in rupee against dollar may weigh on gold sentiments, as it would make gold cheaper. Much of the currency movement would depend on the safe passage of FDI, which is being debated in the lower house of parliament.
Delhi spot gold of 99.9% purity was seen lower at Rs 31,680 per 10 grams and gold of 99.5% was seen at Rs 31,480 per 10 grams.
The physical demand is subdued as investors are waiting for further price fall. As the sudden rise in gold price have constraint people from buying.