Gold futures slipped in electronic trade tracking weak global cues weighed by comments from Federal Reserve.
The Federal Reserve said that it will hike interest rates when it will see some further improvement in the labor market and is reasonably confident that inflation will be considerable. Also said that economic activity has been expanding moderately in recent months.
If the economy improves as expected the Fed will hike interest rates when the Fed meets again in September.
Strengthening of the dollar against basket of currencies further weighed on gold. International gold were seen hovering around five and half years low at $ 1,086 an ounce.
Gold futures for August 2014 contract, at MCX, seen trading at Rs 24,614 per 10 grams, down by 0.43 per cent or Rs 106. It touched an intra-day low of Rs 24,565.
Gold prices in the country may even dip to Rs 20,500 per ten grams, a level last seen about 5 years ago, in case of a rate hike by US Federal Reserve later this year, according to India Ratings and Research (Ind-Ra), reports PTI.
The fall in prices may attract physical buyers of India.