Silver on the other hand was trading lower by Rs 79 at Rs 44,049 on the MCX.

According to a Reuters news report international spot gold is headed for its biggest monthly drop since June.

In India gold prices have not dropped as sharply largely on account of the rupee which has been falling making gold more expensive.

Gold is now likely to take cues from the Fed meeting slated for next month and any QE3 tapering if undertaken is likely to see gold dropping sharply.

Over the last few months there has been an increasing preference for equities with markets like the Dow Jones and the German DAX hitting new record highs, as investors dump gold and chase equities, following an improvement in the global economy.

In fact, gold is set to witness its first drop in 12 years. The downside threat remains should the Fed decide to undertake a tapering exercise in December. Check gold rates here

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