Taking a cue from a slump in gold prices, the other precious metals like silver saw its prices hit a five-year-low on Friday.

Silver broke the psychologically important level of ₹34,000 per kg on the back weakening demand for the metal from jewellers and retailers besides a drop in global demand.

Silver prices fell ₹380 to close at ₹33,950 per kg at the bullion market, hitting their lowest level since 29 September 2010, NDTV said.

At the global level, silver prices dropped 1.1% to $14.50 an ounce, reaching their lowest level since December last year.

Precious metal prices have been under pressure for the past few sessions, as the US dollar strengthened on rising expectations over an interest rate hike by the US central bank in September.

"According to the poll taken by the Wall Street Journal last week, 82% of the 70 economists think that the US central bank will make its first rate move in September, with the fed funds rate rising to 1.75% by end-2016," said Capital Economics in a note.

Recent improvement in US economic data is further weighing on the precious metals.

An official data showed that the number of people applying for unemployment benefits in the US fell to its lowest level in more than 40 years, indicating that the employment situation remains solid in the country.

The data further strengthened the case for monetary policy tightening by the US Federal Reserve.

On the other hand, gold continues to be under selling pressure, with prices declining by ₹320 to trade at ₹25,050 per 10g.

"Good US labour market data are weighing on the gold price – last week saw the lowest number of new jobless claims filed since November 1973," said Commerzbank in a note.