Indian gold futures edged lower on Wednesday tracking cues from a weak overseas market and as traders eye the U.S. Federal Reserve for direction.
Fed Chairman Ben Bernanke said last month the bank could scale back its $85 billion monthly bond purchases if the U.S. economy strengthens, but a lack of clarity on the timing has unsettled markets. A policy statement from the central bank will be released on Wednesday after its meeting.
At 1:40 p.m., the most-actively traded gold for August delivery on the Multi Commodity Exchange (MCX) was 0.18 percent lower at 27,915 rupees per 10 grams.
Silver for July delivery on the MCX was 0.50 percent lower at 43,822 rupees per kilogram.
In the overseas market, gold slipped for a third straight session as a rally in stocks and investor caution over the Federal Reserve curbing its stimulus programme sapped support for bullion.
In the physical market, demand remained weak after the government raised import duty by a third to 8 percent, following a ban on consignment imports by the central bank.
"There is no much demand..." said Suresh Jain, proprietor, SJ Jain Jewellers in Mumbai, adding that sales could pick up from August.
The festival and wedding season has ended and will re-start in August.
The country's gold imports fell from an average of $135 million in the first half of May to $36 million in the second half, Finance Minister P. Chidambaram said.