Gold Futures for Oct delivery dropped sharply by 2% and were last trading at Rs 29,912, a drop of Rs 632 over the previous days closing.
Silver for October delivery was trading even worse, dropping 4.72%, at Rs 49,306.
International gold prices had rallied substantially on Wednesday and Indian Gold Futures gained ground on Thursday following the Fed decision to keep QE3 on hold.
Gold prices may continue to retreat again in the next week as the uncertainty over the Fed's QE3 programme continues. The Fed's QE3 programme or bond buying programme is a means of stimulating the US economy by buying bonds and enhancing liquidity.
This liquidity finds its way into stock markets and gold, which pushes their prices higher. Check gold rates here