Mumbai: Indian gold futures were slightly down on weak overseas markets on Tuesday, but prices may remain rangebound ahead of this week’s US Federal Reserve meeting on interest rates, analysts said.
Gold for delivery in June was down Rs27 at Rs11,588 per 10 grams at around 11:30am on the Multi Commodity Exchange of India Ltd. The August contract shed Rs30 to Rs11,639.
“The market is looking for further direction from the Fed meeting...it is not likely to make any significant moves before that,” said Gnanasekar Thiagarajan, director, Commtrendz Research.
The Fed, which has taken a number of steps to forestall a deep US economic recession and prevent a financial market meltdown, is expected to cut interest rates when its two-day meeting ends on Wednesday.
However, analysts also believe the rate cut could be a modest 25 basis points and the Fed may signal that its rate-cutting campaign is over.
Gold often takes cue from movements in the dollar, which is impacted by the Fed’s rate changes, because of its role as an alternative investments to currencies, stocks and bonds.
Traders would also be closely watching the US consumer confidence report and currency markets for further direction to the yellow metal, said Kishore Narne, vice president, Anand Rathi Commodities.
Open interest for June gold on MCX was at 7,903 lots, up from 7,830 lots the previous session. Volume on Monday was 25.4 kg.