Gold on MCX settled down -0.51% at 29020 as speculation grew that the U.S. Federal Reserve would press ahead with a rate increase this month. Fed Chair Janet Yellen said that the central bank is set to raise its benchmark interest rate later this month as long as economic data on jobs and inflation holds up. Prior to Yellen's comments, the probability of a Fed move in March had already risen to nearly 80 percent, money markets indicated, after hawkish comments from New York Fed chief William Dudley and San Francisco Fed President John Williams.
"If there has been a conscious effort (to raise expectations for a rate hike) I'm about to join it," Fed Vice Chairman Stanley Fischer told an economists' forum, when asked about comments by other Fed officials this past week that have boosted market odds of a March rate hike. Gold demand in Asia was tepid this week with investors delaying fresh purchases anticipating a further drop in local prices as the global spot market was pressured by expectations of a hike in interest rates by the U.S. Federal Reserve.
Gold discounts in India, the world's second-largest consumer of the metal, expanded this week to their widest in two months. Dealers in India were offering a discount of up to $3 an ounce in the week from official domestic prices, the widest it has been since the last week of December. In top consumer China, physical demand for gold has been stable, traders said, with premiums being quoted between $9-$12 an ounce over international spot prices, compared to the $7-$8 levels seen last week.
Technically market is under long liquidation as market has witnessed drop in open interest by -2.48% to settled at 6130 while prices down -150 rupees, now Gold is getting support at 28914 and below same could see a test of 28809 level, And resistance is now likely to be seen at 29162, a move above could see prices testing 29305.