Gold and silver futures fell more than 2.5 percent and 4 percent respectively in tandem with the decline in the overseas markets. The actively traded gold for August delivery on MCX was 2.36 percent lower.

Gold fell more than 2.5 percent on Wednesday to its lowest level in over a month and silver futures fell more than 4 percent, in tandem with declines in overseas markets, although supplies were not enough in the physical market to meet rising demand.

The actively traded gold for August delivery on the Multi Commodity Exchange ( MCX ) was 2.36 percent lower at 25,931 rupees per 10 grams, after hitting a low of 25,758 rupees, a level last seen on May 20.

Global gold fell to its lowest in nearly three years, pressured by strong US economic data that boosted stock markets and supported the US Federal Reserve's plan to scale back monetary easing in the next few months.

Read more: mcxstar.com/ gold-silver-futures-fall-sharply-demand-outstrips-supply