|Chennai||Rs. 25020.00 (0.81%)|
|Mumbai||Rs. 25890.00 (0.98%)|
|Delhi||Rs. 25200.00 (-0.2%)|
|Kolkata||Rs. 25480.00 (1.03%)|
|Kerala||Rs. 24800.00 (0.61%)|
|Bangalore||Rs. 25000.00 (0.81%)|
|Hyderabad||Rs. 25080.00 (1.09%)|
Gold fell more than half a percent to its weakest level in three weeks on Thursday, as hope grew that a U.S strike on Syria could be avoided and on expectations the U.S. Federal Reserve would start to unwind its monetary stimulus soon.
Gold's safe-haven appeal has been dented by diplomatic efforts to place Syria's chemical weapons under international control, which may avert a U.S. military strike.
Gold had dropped $8.03 to $1,358.11 an ounce by 0400 GMT, after hitting a low of $1,354.10 - its weakest since August 20. Prices remain way off their record high around $1,920, struck in 2011.
"It looks like with the politicians taking a much more measured approach to the problem in the Middle East, gold has lost its shine again," said CIMB regional economist Song Seng Wun.
"In the absence of any other development, people are taking some money off the table again, although I think that both the short-term and medium-term view towards gold hasn't changed," said Song, adding that data suggesting inflation is starting to creep back could still support the metal.
U.S. gold declined $5.60 to $1,358.20 an ounce.
The Fed's Open Market Committee (FOMC) is set to meet on September 17-18, with investors fretting that the central bank will start curbing the massive bond buying programme that has boosted gold's appeal as a hedge against inflation.
Gold prices have fallen more 18 percent since the Fed signalled it would start reining in its monetary stimulus programme by year-end.
"We expect that with the FOMC meeting looming on the horizon, gold will trade quietly for the next few sessions, with the resultant moves in the U.S. dollar and Treasury yields to drive gold directionally," ANZ said in a report.
Metals consultancy Thomson Reuters GFMS said gold prices were likely to contract further in 2014 due to confidence in a stabilising global economy.
Elsewhere, the physical market in Singapore saw sales of gold scraps from Indonesia, whose rupiah currency has tumbled to its weakest since 2009, while demand from main consumer India was muted.
"The physical market has been slow even though gold prices have come down. I would think the price has to fall below $1,350 before we see more buying. Weakness in regional currencies is also curbing buying interest," said a dealer in Singapore.
"India is still affected by the new regulations."
India has raised the import duty on gold to a record high of 10 percent in an effort to stem the tide of imports of the metal that had helped push the current account deficit to an all-time high.