The prices of gold withdrew from three-week high in the previous session on Tuesday, as investors remained cautious ahead of the monetary policy meeting of the Federal Reserve should start later in the day.
Monetary policy meeting of Fed beginning two days at end of day with a testimony expected on Wednesday. The markets are on the lookout for any indication that the central bank could begin raising interest rates.
Spot gold little changed at $ 1,270.90 an ounce at 0316 GMT. The metal touched a up to three weeks of $ 1284.85 longer duration on Monday prior to closing 0.4 percent on profit taking.
At U.S, gold for delivery in August slipped to a session low of $ 1263.70 the, lowest troy ounce from June 12 before paring losses to last trade of $ 1266.20 during the hours of European morning trade, down 0.71%, or $ 9.10.
On 1 :15 PM IST , At the Multi Commodity Exchange, gold prices for delivery in far-month October fell Rs 61, or 0.23 per cent, to Rs 26,834 per 10 grams.
The market analysts said the drop in gold futures was primarily due to the end of the booking by profiteers and weak trend overseas before the U.S. Fed starts a two-day meeting today.
Expected to draw the support of the Iraqi situation – Gold – considered a hedge against political uncertainty and riskier assets like stocks.
President Barack Obama considered to the options for military action to support the embattled government of Iraq, while U.S. and Iranian officials held talks to stabilize the region, which has been marred by the Sunni rebel advance toward Baghdad.
Investor confidence, however, was bearish as holdings of SPDR Gold Trust, dropped 4.20 tonnes to 782.88 tonnes on Monday – about a minimum of five years.