Yellow metal in reverse gear ahead of US Fed meet

Yellow metal in reverse gear ahead of US Fed meet

13/12/2016 13:07

Gold futures fell during afternoon trade in the domestic market on Tuesday as investors and speculators exited their positions in the precious metal on looming worries over an imminent interest rate hike by the US Federal Reserve in a key meeting that begins later in the day.

The US Fed is widely expected to raise interest rates in a two-day meeting on December 13-14, which could boost the US dollar.

Precious metal is highly sensitive to rising interest rates, which lift the opportunity cost of holding non-yielding assets such as bullion.

At the MCX, gold futures for February 2017 contract is trading at Rs 27,597 per 10 grams, down by 0.25 per cent, after opening at Rs 27,635, against a previous close of Rs 27,666. It touched the intra-day low of Rs 27,565 (at 12:54 hours).

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