Gold futures climbed above $950 an ounce on COMEX on Wednesday on lingering economic worries, but the U.S. Federal Reserve's strong resolve to fight inflation could still pressure the metal in the near term. It inched up by 0.47 percent on MCX.

Silver futures outperformed gold by a good margin. It witnessed a rise of 0.96 and 1.66 percent on MCX and COMEX respectively.

IN FOCUS:

Jewelry demand in India, the world's largest gold consumer, remained slack as buyers awaited lower prices, while jewelers in Thailand cashed in their bullion on Wednesday after prices broke through $950 an ounce.

The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said holdings fell to 1,086.61 tonnes as of July 22, down 5.8 tonnes, or 0.5 percent, from the previous business day. The fund, New York's SPDR Gold Trust, has sold nearly 39 tonnes of gold in the last four weeks, equal to almost 3.5 percent of its total holdings.

The volume of gold jewellery sales in Saudi Arabia has fallen as much as 30 percent in the first six months of the year, as the economic crisis and high gold prices deter buyers, gold retailers said on Wednesday. Demand for gold in the Middle East fell 26 percent year-on-year during the first quarter, the World Gold Council said in its quarterly report in May.

Fed Chairman Ben Bernanke sought to dispel concerns the U.S. central bank's aggressive monetary easing could end up fueling inflation, saying he was confident the Fed could pull back its extraordinary stimulus when the time was right.

FUNDAMENTAL OUTLOOK:

Gold prices continue to move up despite drop in holding of largest Gold ETF gold. We believe weak outlook of dollar is the main reason for prices to move up. Due to sharp uptick in base metals prices, we have seen a good rally in Silver too. Silver looks particularly very strong for the day.