Gold and silver are seeing massive selling pressure in evening trade due to rebound in the dollar and on concerns over a second wave of coronavirus infections in Europe and the United Kingdom.

Investors are turning their focus to Federal Reserve Chairman Jerome Powell, who is scheduled to appear before the US Congress later in this week, for further guidance on the Fed’s approach to inflation, which may provide some strength to the dollar and could correspondingly weaken the global gold prices in the weeks ahead.

The Dollar Index is trading 0.9 percent higher at 93.79.

Tapan Patel, Senior Analyst (Commodities), HDFC Securities, attributed the sell-off to recovery in the Dollar Index, second wave of coronavirus infections in Europe and the UK, and on reports that HSBC and other banks have moved large amount of illicit funds that triggered a sell-off in equity market.

Ravindra Rao, VP - Head Commodity Research at Kotak Securities, said this has been the lowest level for the precious metal in the last two months and "was defended by the bulls very strongly."

In the futures market, gold touched an intraday high of Rs 51,650 and a low of Rs 49,815 on the Multi-Commodity Exchange (MCX).

Gold futures for October delivery fell Rs 1,720, or 3.33 percent, to Rs 49,995 per 10 gram in evening trade on a business turnover of 8,285 lots. The same for December slipped Rs 1,742, or 3.36 percent, to Rs 50,118 on a business turnover of 9,754 lots.

Gold futures for October delivery fell Rs 1,720, or 3.33 percent, to Rs 49,995 per 10 gram in evening trade on a business turnover of 8,285 lots. The same for December slipped Rs 1,742, or 3.36 percent, to Rs 50,118 on a business turnover of 9,754 lots.

While silver futures for December delivery tanked Rs 6,822, or 10.05 percent, to Rs 61,055 per kg at 21:04 hours on a business turnover of 16,493 lots. The same of March quarter decreased Rs 6,008, or 8.55 percent, to Rs 64,256 per kg on a business volume of 399 lots.

The value of gold October and December contracts traded so far is Rs 8,240.05 crore and Rs 953.89 crore, respectively. The value of silver December and March contracts traded so far is Rs 7,011.24 crore and Rs 62.33 crore, respectively.

Going forward, Sunandh Subramaniam, Senior Fundamental Research Analyst, Choice Broking, expects bullion prices to decline in the week ahead as the UK is currently pondering a second, shorter 'mini' lockdown for two weeks to counter resurgence in coronavirus cases. "Moreover, concerns about the health of the global economy, and weak industrial demand from China and Asian countries is expected to further pressurise global and domestic prices."

Those who missed the sharp rally may have a reason to cheer. Sunilkumar Katke, Head of Commodities and Currency at Axis Securities, said, “Looks like we may see Rs 48,500 levels on gold and Rs 61,000 on silver."

At 15:40 (GMT), spot gold was down $57.80 at $1,892.72 an ounce in London trading, while spot silver slipped $2.56 to $24.20 an ounce.