Gold for February delivery fell $0.70 (0.04%) to settle at $1,683.2 an ounce on the Comex division of the New York Mercantile Exchange on Wednesday.
On Wednesday, March silver rose by a penny to settle at $31.54 an ounce.
As per a latest report, A Thomson Reuters GFMS Gold Survey on Wednesday forecast that investment demand will drive average gold prices to a record in the first half of 2013 on loose monetary policies and swelling sovereign debt. It also said gold investment rose to record levels in dollar terms last year.
Interestingly, the German central bank, the Bundesbank, on Wednesday said it is bringing back to Frankfurt a significant portion of its gold reserves that have been stored in New York City, and all of its reserves held in France. The move will be gradual. The Bundesbank downplayed the move and said it was not because the bank expects a worldwide crisis or because it wants to become more active in the gold market.
In the currency market, the dollar index, which weighs the strength of the dollar against a basket of six other currencies rose by 0.1%.
In economic news, the Federal Reserve reported Wednesday that U.S. industrial production rose for a second month in December on increased demand for business equipment.
In the latest Beige Book, the Fed said the U.S. economy expanded at either a modest or moderate pace across the country in December and early January, as spending and hiring were held down by concerns over fiscal policy. The dollar showed little reaction to the Fed's anecdotal report about U.S. economic conditions.
On Tuesday, the World Bank sharply curtailed its forecast for global growth in 2013, warning of the negative impact of the political battle in the United States over spending cuts and raising the nation's debt limit. World Bank cuts 2013 global GDP forecast to 2.4% from 3.0%
At the MCX, gold prices for February delivery closed higher by Rs 23 (0.07%) at Rs 30,892 per ten grams. Prices rose to a high of Rs 30,934 per 10 grams and fell to a low of Rs 30,821 per 10 grams during the day's trading.
At the MCX, silver prices for March delivery closed higher by Rs 259 (0.43%) at Rs 59,718/Kg. Prices opened at Rs 59,584/kg and rose to a high of Rs 59,787/Kg during the day's trading.
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