The most-active gold for February delivery fell 0.57 percent to 28,409 rupees per 10 gram at 1022 GMT on the Multi Commodity Exchange.
Silver for March delivery was down 0.19 percent at 44,684 rupees per kg."Weighing on prices is the Fed's decision to taper asset purchases starting January 2014," Kotak Commodity Services analysts wrote in a note. "Upbeat U.S. economic data indicates strength in the economy reducing the need for stimulus."International gold steadied in thin holiday trade, supported by some physical buying yet remained on track for its biggest annual loss in three decades as rallies in equities and prospects of a global economic recovery dented its appeal.
The partially convertible rupee, which plays a key role in determining the landed cost of the dollar-quoted yellow metal, inched up tracking gains in domestic shares and other Asian currencies.
Indian gold imports may fall 70 percent in the final quarter of 2013 from 255 tonnes in the year-ago period and are expected to be half the usual levels at 500-550 tonnes next year if new import rules are maintained, a top trade body official said.
To curb a rising trade gap, the Indian government slapped a record import duty of 10 percent earlier this year and tied imports for domestic consumption with exports.