Gold futures closed lower in the domestic market on Thursday after the U.S. dollar touched its highest levels since January on the back of increased suggestions from Federal Reserve officials fora near-term interest-rate hike.
Higher rates can diminish demand for assets like gold which don’t offer a yield. But rate increases can also deliver a fillip to the U.S. dollar, making commodities priced in the currency less appealing to buyers using other monetary units.
At the MCX, gold futures for April 2017 contract ended at Rs 29166 per 10 grams, down by 0.89 per cent, after opening at Rs 29,419 against a previous close of Rs 29,428. It touched the intra-day low of Rs 29,143.