Gold eased on early Tuesday but was not far from two-month highs hit in the previous session. Failing to hold Rs 31,000 mark, the yellow metal prices moved lower by Rs 204 to Rs 30,961 per 10 grams in futures trade.
The precious metal has risen about 6.5 percent over the last 10 sessions, supported by signs of increasing physical demand from China and India.
Traders said they are expecting a further drop in prices as gold losses its momentum, with investors waiting for details from the U.S. central bank’s July policy meeting, for hints on when it will start reducing its bond-buying programme.
The Fed, which will release the details of its July policy meeting on Wednesday, had indicated that it could start narrowing the bond purchases.
Indian traders said they will start importing gold again over the next week or so after the central bank clarified a new rule that brought the flow of the precious metal into the world’s top gold consumer to a standstill at the end of July.
Silver also declined by Rs 75 to Rs 50,610 per kg on lack of buying support after steepest rise in last week.