Gold prices dipped to a severe low on Wednesday on the back of flat gold rates in the global markets which, in turn, were a result of a stronger US dollar offset. Gold futures on MCX dropped 0.4% to Rs 51,140 per 10 gram, which marks the fourth fall in five days. Similarly, silver rates also dropped as the silver futures showed a decline of 0.75% to Rs 67,982 per kg.

In the previous session, gold prices had risen by 0.6% amid fluctuating prices for the metal, ever since it touched a record of Rs 56,200 per 10 gram last month.

Gold prices slipped on Wednesday as a stronger dollar offset support from a pullback in global equities, while investors awaited monetary policy strategies from central banks this week.

In the world market, spot gold was down 0.3% at $1,925.97 per ounce by 0616 GMT. U.S. gold futures fell 0.5% to $1,933.80.

"Traders in Asia will adopt a cautious tone, preferring to wait for New York to open and clearer evidence as to whether the USD rally and stock market sell-off will continue," said Jeffrey Halley, a senior market analyst at OANDA.

"However, a deeper correction below $1,900 cannot be ruled out if the dollar stays strong," he added.

Weighing on gold`s appeal, the dollar index rose to a near one-month high against its rivals.

But bullion found some support as Asian shares weakened, following a tech-led selloff on Wall Street on Tuesday that had forced investors to seek safe havens.

Investors now await the outcome of the European Central Bank`s policy meeting, due on Thursday. While no major policy moves are expected since it has acted aggressively to shore up the virus-hit economy, investors will watch out for its inflation forecasts.

Gold is used as a hedge against inflation and currency debasement.

The Bank of Canada`s policy meeting is also on Wednesday, while the U.S. Federal Reserve`s meeting is scheduled for next week.

On the technical front, spot gold is expected to retest a support at $1,906 per ounce, a break below which could cause a fall to $1,880, said Reuters technical analysts Wang Tao.

Elsewhere, platinum was down 0.1% at $900.57 per ounce. On Tuesday, the World Platinum Investment Council changed its forecast for the market in 2020 from a surplus to a deficit.

Silver dipped 0.2% to $26.65 per ounce, while palladium rose 0.5% at $2,284.75.

(With Reuters inputs)