Prices of gold futures traded near a low of 5-1/2 year on Tuesday as US equities surged and investors looked in advance to the monetary policy statement from the Fed to any fresh stated when it can start raising interest rates.
On the Comex in New York Gold futures delivery in December shed $2.60, or 0.24%, to trade at $1,094.30 a troy ounce. While, Spot gold was flat at $1,093.45 an ounce.
In the midst of weaker gold prices, the holdings of the world’s largest gold-backed exchange-traded fund, the SPDR Gold Trust, dropped its seventh day on Friday to 21.87 million ounces, the lowest since September 2008.
Fed officials began a two-day meeting on Tuesday and the authorities will issue a statement at the end of the meeting that can give you an idea of when they plan to start tightening. While economists see no possibility that the central bank will raise rates this week, who put the probabilities of a September hike by 50 percent, according to a Bloomberg survey released July 22 showed.
Fed President Janet Yellen said that the central bank may raise rates as early as September if the economy keeps getting better as expected.
Gold has been under heavy selling pressure in recent months amid speculation the Federal Reserve would hike interest rates for the first time in nine years, as soon as September.
Money managers, that have been been cooling in gold for a while, last week kept shorter than long positions in the precious metal for the first time in almost a decade ago, Bank of America, said, suggesting an expect prices will continue to fall.
Also on the Multi Commodity Exchange (MCX), Gold prices slipped on Tuesday. MCX Gold October contract was trading at Rs 25,025 down Rs 93, or 0.37 percent.
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