Gold futures dip ahead of Fed meeting

Mumbai-India (Jan 28)  Gold futures fell in the domestic market on Tuesday as investors and speculators exited positions in the precious metal mirroring weak cues from overseas markets amid slowing physical demand for gold in Asia ahead of the Lunar New Year.

Further, speculation that the US Federal Reserve may continue tapering its monthly bond buying program when it meets this week clouded the outlook for the precious metal, which is a hedge against the inflationary risk of monetary stimulus. The Fed is likely to taper QE by USD 10 billion to USD 65 billion this week after taking a similar cut in December.

Gold futures for February 2014 contract, at MCX, is trading at Rs. 29,608 per 10 grams, down by 0.64 per cent after opening at Rs. 29,718, against the previous closing price of Rs 29,798. It touched an intra-day low of Rs 29,520 (At 10:39 AM).