Gold prices in Delhi fell by ₹1,300 to ₹1,13,800 per 10 grams as investors booked profits ahead of the US Fed policy decision.
On Tuesday, gold had hit a record high of ₹1,15,100 per 10 grams (99.9% purity).
Analysts said caution prevailed as markets awaited Fed guidance on interest rate cuts.
Silver dropped ₹1,670 to ₹1,31,200 per kg after touching ₹1,32,870 in the previous session.
Gold prices retreated from peak levels and traded ₹1,300 lower at ₹1,13,800 per 10 grams in the national capital on Wednesday, as investors rushed to book profits ahead of the US Federal Reserve's policy decision.
According to the All India Sarafa Association, gold of 99.5% purity declined by ₹1,300 to ₹1,13,300 per 10 grams (inclusive of all taxes) on Wednesday.
On Tuesday, the precious metal of 99.9% and 99.5% purity had jumped ₹1,800 each to touch a lifetime high of ₹1,15,100 and ₹1,14,600 per 10 grams, respectively, in the Delhi bullion market.
"Gold traded weak on profit booking ahead of the crucial Fed policy decision, as participants trimmed risk before the outcome. The sentiment remains cautious, with markets awaiting not just the rate cut but also the Fed's forward guidance on further easing.
"Any neutral stance or less dovish comments without a clear roadmap for additional rate cuts could trigger a couple of percentage points of downside in bullion," said Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities.
Silver too gave up gains and drifted lower, with profit-taking weighing on sentiment.
The white metal slumped ₹1,670 to ₹1,31,200 per kilogram (inclusive of all taxes) on Wednesday. In the previous session, it had scaled a new record of ₹1,32,870 per kg, after rising ₹570.
Globally, gold and silver also witnessed a pullback after hitting fresh peaks, as investors stayed cautious ahead of the Federal Open Market Committee's (FOMC) policy announcement later in the day.
Spot gold slipped nearly 1% to USD 3,664.82 per ounce after scaling an all-time high of USD 3,703.23 per ounce on Tuesday.
"Spot gold eased slightly to USD 3,664 per ounce as the dollar attempted a recovery from near its lowest level in three years ahead of the highly anticipated Federal Open Market Committee rate decision.
"Investor attention now turns to Federal Reserve (Fed) Chair Jerome Powell's post-decision press conference and the updated dot plot, with markets seeking guidance on the Fed's policy path through the remainder of 2025," said Kaynat Chainwala, AVP Commodity Research, Kotak Securities.
Praveen Singh, Head of Commodities and Currencies at Mirae Asset Sharekhan, said, "The US Fed is expected to slash the benchmark rate by 25 basis points, but Fed governors such as Stephen Miran and Michelle Bowman may dissent to pave the way for aggressive interest rate cuts later." Silver too dropped by nearly 3% to USD 41.38 per ounce.
