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Taking cues from global markets, bullion prices fell sharply in the domestic markets. In Mumbai, standard gold was down by ₹315 per 10 grams on Thursday at ₹25,165 while pure gold fell by ₹335 to ₹25,315 per 10 grams.
Silver fell by ₹290 per kg to ₹33,940.
The Chicago Mercantile Exchange saw gold for February delivery at a six-year low of $1,053.80 an ounce after falling by $9.70 on Thursday.
Silver for March delivery fell 7.4 cents to $14.009 an ounce.
Fed hike imminent US Federal Reserve Chairperson Janet Yellen on Wednesday made it clear that the interest rate in the US would be increased for the first time in almost a decade after the scheduled meeting on December 15-16.
A higher interest rate is a negative for gold as it will strengthen the dollar and weaken gold prices in dollars.
Amit Gupta, Research Analyst, Kedia Commodity Comtrade, said gold prices will remain weak with the US Fed expressing more confidence on raising the interest rate this time around.
The range-bound rupee, against the dollar, would have very little impact on gold prices this time around, he added.
“US Fed chief Yellen’s comments come after expectations for a US rate hike were slightly shaken on the back of poor manufacturing data released earlier in the week. US non-farm payrolls data on Friday will be keenly watched for more clues,” he said.
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