Gold on MCX settled down -0.42% at 28629 as the dollar gathered strength on the prospect of a U.S. interest rate hike. Markets dramatically adjusted expectations for U.S. interest rate hikes this year following hawkish comments from several top Fed officials last week. The ADP National Employment Report showed its biggest increase in more than a year in February, suggesting the U.S. economy remains on solid ground.
Investors are awaiting February non-farm payrolls data on Friday as a barometer of the U.S. economy after Federal Reserve Chair Janet Yellen said last week the central bank was poised to lift rates provided jobs and inflation data held up. Her comments were seen as cementing plans for an increase at the Fed's March 14-15 meeting.
The European Central Bank is set to keep monetary policy on hold on Thursday as it casts a cautious eye ahead to high-risk elections in the Netherlands and France during an upsurge in populist, anti-establishment sentiment. Holdings of the largest gold-backed exchange-traded-fund (ETF), New York's SPDR Gold Trust GLD, remained unchanged on Tuesday from Monday.
The Perth Mint's sales of gold products dipped in February to the lowest in six months, while silver sales more than halved from the previous month, the mint said in a blog post on its website. Technically market is under fresh selling as market has witnessed gain in open interest by 1.41% to settled at 6124 while prices down -122 rupees, now Gold is getting support at 28549 and below same could see a test of 28468 level, And resistance is now likely to be seen at 28743, a move above could see prices testing 28856.