Trading sentiment turned bearish after gold declined in overseas markets as a strengthening US dollar reduced the demand for the precious metal as an alternative investment, reported PTI citing traders.

Besides, weak demand from local jewellers also weighed on gold prices, traders added.

Globally, gold prices dipped as the dollar strengthened and some investors locked in profits ahead of the US Federal Reserve meeting next week, reported news agency Reuters.

Spot gold was down 0.5 per cent at $1,417.41 per ounce in intraday trade.

US gold futures slipped 0.6 per cent to $1,417.90 an ounce.

"Gold prices witnessed decline after dollar index gained strength ahead of ECB meeting and US Debt ceiling deal," Press Trust of India quoted Tapan Patel, senior analyst (commodities), HDFC Securities as saying.

In Delhi, gold of 99.9 per cent and 99.5 per cent purity fell by Rs 250 each to Rs 35,720 and Rs 35,550 per 10 gram, respectively.

Sovereign gold also fell by Rs 100 to Rs 27,400 per eight grams.

Silver ready dropped Rs 10 to Rs 41,950 per kg, while weekly-based delivery fell by Rs 38 to Rs 41,035 per kg.