Gold futures tumbled for the second consecutive session after rallying nearly $100 so far this month after yesterday’s Fed meeting minutes showed Federal Reserve officials discussed the possibility of raising interest rates sooner than expected.
According to the minutes of the Federal Open Market Committee meeting held on Jan. 28-29, some participants said that it might be appropriate to increase the federal fund rates relatively soon.
Gold for April delivery are trading down $9.8 at $ 1310.6 an ounce on the Comex division of the New York Mercantile Exchange. Yesterday, it fell $4, or 0.3%, to settle at $1,320.40 an ounce before the Fed minutes were released.
The yellow metal has gained in recent weeks due to soft jobs, manufacturing and other economic indicators that have prompted many investors to speculate that the Federal Reserve may slow the pace at which it tapers its asset-buying stimulus program.
On the data front yesterday, the Commerce Department reported earlier that U.S. housing starts fell 16% in January to 880,000 units, outpacing expectations for a 5.7% drop, though a series of winter storms may have played a factor.
The number of building permits issued last month declined by 5.4% to a seasonally adjusted 937,000 units, outpacing expectations for a 1.8% decline.
A separate report revealed that the U.S. producer price index rose 0.2% last month, beating forecasts for a 0.1% gain, while core producer prices were also up 0.2%.
MCX April bullion may open today’s session near Rs 29850 levels with support around Rs 29750-650 levels.