Precious metals skid on Wednesday on a higher dollar and heavy oil losses, losing more than 2 percent on COMEX as investors preferred the U. S. currency instead of gold as a safe haven in the face of economic uncertainties.

Gold futures on MCX fell by 0.74 percent, compared with the fall of 2.12 percent on COMEX, as the weakness in rupee against the dollar capped the downside. Silver futures also declined, losing 1.12 percent on MCX.

The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said holdings stood at 1,109.81 tonnes as of July 8, down 10.38 tonnes or 0.9 percent from the previous business day.

On Tuesday, CFTC Chairman Gary Gensler said in a statement that the agency would hold hearings to see whether federal speculative limits should be set by the CFTC on all commodities of finite supply.

Gold buying in India, the world's largest bullion consumer, was weak as the dollar strengthened against the rupee, making the metal more expensive for local consumers. Meanwhile, gold jewelry sales in Dubai were down 30 percent in June from a year earlier, as high prices and the economic downturn hit buying.

The first quarter GDP of Euro Zone fell by 2.5 percent over the previous quarter figure. The same had fallen by 1.8 percent in the previous quarter.

We witnessed a sharp correction in precious metals in the last day as the dollar showed some strength against the euro and investors took flight to quality by resorting to the treasuries. Today, we have unemployment reports from the U. S. and any further weakness in these numbers may weaken the dollar followed by some upside in bullions. We expect gold to trade sideways to up during the day. We recommend buying gold at dips.