Mumbai Notwithstanding the sharp overnight rise in US bullion futures; gold and silver futures were trading slightly lower amid profit-booking of yesterdays gains during early trade on the Multi Commodity Exchange (MCX) Tuesday. While December gold dropped Rs 78/10gm; December silver traded down Rs 25/kg.

Citigroup reiterates its positive view on gold prices going forward. It says despite new investment demand gold currently being held back by poor sentiment toward industrial metals, firm dollar, plus dis-inflationary data points on durable goods, manufacturing and labor. Spot gold at USD862.12, up USD6.82 since New York close.

Gold futures rose sharply Monday as worries about the global financial system continued and sent global stock bourses sharply lower. "It's capitalizing on its safe-haven credentials," said Bart Melek, global commodity strategist with BMO Capital Markets. December gold rose USD33 to settle at USD866.20 an ounce on the Comex division of the New York Mercantile Exchange. It was one of the few commodities to rise, as most - including silver - fell on worries about economic prospects. Meanwhile, December silver futures lost 4 cents to USD11.285 an ounce.

MCX benchmark December gold contract opened down Rs 47 at Rs 13,289/10gm. The contract fluctuated between Rs 13,253 and Rs 13,289/10gm. At 10.05 am IST, the contract traded down Rs 78 at Rs 13,258/10gm.

MCX benchmark December silver opened down Rs 88 at Rs 19,007/kg. The contract tossed between Rs 19,007 and Rs 19,094/kg. At 10.05 am IST, the silver contract traded down Rs 25 at Rs 19,070/kg.

(With inputs from Dow Jones Newswire)