Precious metals erased initial gains to finish almost flat on Wednesday as the dollar bounced back against Euro. Signs of lagging physical jewelry demand prompted investors to take profits and pressure the gold prices. However, the downside was capped as the investors took fresh positions on the back of inflationary concerns.

Silver futures ended the day marginally by 0.08 percent and 0.23 percent on MCX and COMEX respectively.

Bombay Bullion Association said India imported 17.8 tonnes of gold in May, down 39 percent from a year ago.

A senior Russian central Bank official said that Russia planned to cut the proportion of U. S. Treasuries in its $400-billion reserves.

SPDR ETF holdings remain unchanged at 1132.15 tonnes as on Wednesday.

Gold lost early gains yesterday night after Treasury bond auction suggested that in coming months we may see a hike interest rate in the U. S. from as there hasn’t been a significant improvement in demand side. So we expect that an upside in Gold might get capped due to strength in base metals and expectation of recovery in industrial production. We recommend buying Silver at dips rather than going short.