|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 climbed off session lows on Tuesday as Chinese buyers picked up the metal, easing some pressure on bullion which has been hit by persistent outflows from exchange-traded funds and has lost nearly a fifth of its value this year.
But the selling pressure on silver appeared mostly intact with prices still near 2-1/2-year lows reached during the intraday sell-off on Monday.
Gold has been hurt by a shift in investments into higher-yielding equities as fears grew that the U.S. Federal Reserve could soon end its bullion-friendly bond-buying program. The metal fell for seven straight days in its longest losing streak in four years before closing up nearly 3 percent on Monday.
"We are seeing some strong buying out of China," said Victor Thianpiriya, commodities analyst at Australia and New Zealand Banking Group. "Physical demand picked up a little bit yesterday and today."
Spot gold was up 0.1 percent at $1,394.90 an ounce by 0627 GMT. It hit a session high of $1,400.90 after falling as low as $1,383.39. Gold prices in Shanghai were about $20 more than spot gold, indicating that demand in China - the world's No. 2 consumer after India - was strong because it would be cheaper for Chinese buyers to purchase gold from overseas.
WAITING ON THE FED
But the modest price gain suggests investors remain hesitant in buying gold which is within striking distance of a two-year low of $1,321.35 hit during April's market rout.
Expectation that the Fed may soon stop its monthly $85-billion bond purchases given recent improvements in the U.S. job market is limiting gold's draw as an inflation hedge.
"Should Bernanke encourage perceptions that the Fed could move somewhat earlier than expected, gold could get hurt as a change in stance may finally usher in higher interest rates," said Edward Meir, a metals analyst at futures brokerage INTL FCStone, referring to Fed Chairman Ben Bernanke.
"Then again, Bernanke may choose to stay on hold and not deviate from previous positions, in which case we could see an element of support set in over the precious group as the 'stimulus spigot' would remain open for now."
Bernanke testifies before a congressional committee on Wednesday, the same day the U.S. central bank releases the minutes of its last policy meeting.
Silver, which had largely held its ground during the sell-off in precious metals last month, appeared to be the next target for sellers.
Spot silver was down 1 percent at $22.69 an ounce. It hit a session low of $22.41, not far off Monday's trough of $20.84 which was its lowest since September 2010. It eventually closed 3 percent higher on Monday.
U.S. silver futures were up 0.37 percent at $22.67 after sliding more than 9 percent during the early sell-off in Asia on Monday.
Holdings of the largest silver exchange-traded fund (ETF), the iShares Silver Trust, had fallen to their lowest since mid-January. Outflows also continued in SPDR Gold Trust, the world's largest gold-backed ETF, with holdings down to 1,031.50 tonnes on Monday, the lowest in more than four years.