Precious metals ended higher on Wednesday after reversing initial losses as investors followed a drop in dollar against the Euro and higher crude oil prices, and as new precious metals investment funds spurred fresh buying.

Gold futures rose by nearly $3.8 or 0.41 percent and settled at $936 an ounce on COMEX while Silver futures gained over a percent on COMEX. However, Gold and Silver gained 0.41 percent and 0.72 percent respectively on MCX.

The U. S. government's consumer price index, its broadest inflation gauge, rose 0.1 percent last month, against expectations for a 0.3 percent increase. The soft U. S. CPI reading may suggest that inflation is not a threat for now.

The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said its holdings stood at 1,132.15 tonnes as of June 17, unchanged from the previous business day.

Canada's Brompton Funds Management Ltd said it will launch a new combined gold, silver and platinum fund. Precious metals funds, including the popular exchange-traded funds, provide a boost to investment demand.

We see weakness in dollar is supporting the upside in precious metals. We expect dollar to weaken further from here as there are signs of treasury yields retreating to previous lows. We recommend buying in gold at dips as the fall in dollar and some fresh fund buying may support the prices further.

Silver has outperformed Gold in the few previous sessions and looks good for the day. We expect an upside in Silver prices during the day.