Gold futures retreated lower after coming in striking distance of $660 mark, which is also a strong resistance level. London spot market experience strong correction and was offered more than $10 lower at $647.00 per troy ounce.

Meanwhile, weaker-than-expected payroll data from the Labor Department triggered a fall in the US dollar.

The People's Bank of China (PBOC), China's central bank, governor Zhou Xiaochuan said that China has concrete plans to diversify its forex reserves and gold is definitely one of the candidates for the bank.

Comex warehouse stocks rose 32,150 ounces to 7,491,315 ounces.

Silver prices retreated lower as bullion complex melted on profit taking. In London spot market silver was offered 36 cents lower at $13.35 per troy ounce. Comex March silver eased 36 cents to $13.36 an ounce as traders decided to take profit.

Base metal prices faded lower as traders and speculators stayed away from the market. While inventory worries is seen dragging down copper, there is no sign of pick in the Chinese demand.

Comex warehouse stocks fell 34,164 ounces to 113,935,516 ounces.