On the MCX, December gold futures fell 0.85 per cent to Rs 48,106 per 10 gm, while silver December futures were at Rs 59,100 per kg.
Gold jewellery demand is expected to contract by 35 per cent in volume terms this fiscal, hit by the coronavirus pandemic and high prices, according to a report.
The demand is likely to see a rebound in the second half of this financial year after a poor performance in the first two quarters, ratings agency Icra said.
"Changed consumer social distancing habits and limitations on social events will slacken the pace of recovery. We maintain a negative outlook on the gold jewellery retail industry, considering the over 35 per cent volume contraction likely in FY21," Icra Vice President K Srikumar said.
Gold jewellery demand fell sharply by 41 per cent during the fourth quarter of FY20, affected by the lockdown in the critical last two weeks of March. The supply chain disruption and restrictions over movement of non-essential goods in April and May resulted in jewellery demand falling sharply by 74 per cent during the first quarter of FY21.
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