U. S. gold futures ended lower on Thursday as a rising dollar prompted bullion investors to lock in profits, erasing initial gains based on inflation worries stoked by quantitative easing measures by central banks.

Silver future lost more than gold on COMEX as it pared 1.36 percent against 0.15 percent fall in Gold. The fall on MCX was less severe as the weakness in rupee capped the downside in precious metals.

The Bank of England stunned investors by boosting its bond buying program, also called quantitative easing, to 175 billion pounds ($297 billion) from 125 billion, beyond a previous limit of 150 billion pounds.

The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said holdings stood at 1,072.87 tonnes as of Aug. 6, unchanged from the previous business day.

In supply news, Gold Fields, the world's No. 4 gold producer, said its output of the metal rose 4 percent in the fourth quarter while production costs fell 6 percent to $512 an ounce.

The world's largest silver producer, Fresnillo, said its board had approved a pre-feasibility study for the development of its Saucito project in Mexico, which could produce up to 9 million ounces of silver a year.

Gold Fields, the world's No. 4 gold producer, expects costs to rise 15 percent in the near term, on the back of a new pay deal for workers, higher electricity tariffs and a stronger rand/dollar exchange rate. It also said production would remain below its long-term target.

The European Central Bank still has serious concerns about an Italian law to tax notional capital gains on central bank gold reserves, ECB President Jean-Claude Trichet said on Thursday.

We expect a slight correction in precious metals in today’s session. The focus for the day is on unemployment numbers from the U. S. We expect dollar to remain strong during the day, adding pressure on the prices of precious metals.