Jewellery demand fell 15 per cent year-on-year to 75.1 tonnes from 88.8 tonnes a year ago, as per the data.

The decline also came after Prime Minister Narendra Modi, in May, urged citizens to curb non-essential gold purchases and consider alternative savings avenues to help reduce pressure on the country’s foreign exchange reserves amid rising import costs driven by volatile crude oil prices.

“I would appeal to people not to buy gold for weddings for one year,” PM Modi said in May amid the ongoing global crisis because of Middle East tensions.

Meanwhile, gold and silver prices drop up to 1 per cent on MCX on Thursday due to profit booking ahead of US Fed policy decision.

“The steady resilience of gold around the $4080 mark reflects a market balancing two powerful forces – a hawkish monetary policy and an escalating geopolitical risk in the Middle East leading to further uncertainties in global economy,” an analyst stated.

While the US Fed’s firm decision to tackle inflation kept the rate unchanged and dialled back immediate September rate-hike expectations, the underlying safe-haven appeal of precious metal will likely get reignited.

“However, the commitment of US Fed to a strict 2 per cent inflation target with no soft leeway, creates a tough short-term macroeconomic backdrop for bullion,” as per the market expert.

“As we head into the festive season back home followed by holiday season in the West, the RBI Monetary Policy next week along with the US Fed’s decision in September and onwards along with other development at both at a domestic and global level will play a crucial role in defining the performance of the yellow metal, and ultimately, jewellery sales,” a market expert stated.