Gold Dips Ahead Of Fed Meet Outcome

Gold futures closed lower in the domestic market on Tuesday as the Federal Reserve was widely expected to wrap up its two-day meeting Wednesday with an increase to interest rates, which typically act as a headwind to prices for the yellow metal.

The Fed’s two-day meeting will wrap up Wednesday, where a dollar-supportive rate increase is widely expected, but not guaranteed. Higher interest rates are typically a negative for gold, because it enhances the appeal of yield-bearing assets; gold doesn’t offer a yield.

At the MCX, gold futures for August 2017 contract ended at Rs 28950 per 10 grams, down by 0.15 per cent, after opening at Rs 28,987 against a previous close of Rs 28,993. It touched the intra-day low of Rs 28,810.

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Suhani Verma

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