MCX GOLD TIPS | Gold extends bearish ride as Fed set to raise rates

MCX GOLD TIPS | The yellow metal remained lower during late morning trade in the domestic market on Tuesday as investors and speculators exited positions in the precious metal amidst caution ahead of the US Federal Reserve’s two-day policy meet beginning next Tuesday in which an interest rate hike, the first since 2006, is widely expected, dimming the lure for Gold as a store of value.

Last week’s upbeat jobs data which signaled the momentum in US labour market recovery bolstered the case for monetary tightening while most Fed officials have also dropped strong hints that the world’s top central bank is all set to exit the era of zero interest rates.

A slump in oil prices to a seven-year low signaled weaker global inflationary pressures, dimming the appeal of the precious metal, a hedge against rising prices.

At the MCX, Gold futures for February 2016 contract is trading at Rs 25,468 per 10 gram, down by 0.33 per cent after opening at Rs 25,500, against the previous closing price of Rs 25,552. It touched the intra-day low of Rs 25,422. (At 11:53 AM).