Gold futures in India eased on Monday to their lowest in a week after hitting a record high last week,weighed down by weak overseas markets.
The most-traded gold for October delivery was 1% lower at 32,660 rupees ($490) per 10 gram at 11 33 GMT (17 03 IST) on the Multi Commodity Exchange (MCX). It had hit a record high of 35,074 rupees on Aug. 28.
Prices are likely to fall further. “This is due to the upcoming Fed meet where a possible tapering can be announced,” said Gnansekar Thiagarajan,director with Commtrendz Research.
Many economists expect the Federal Reserve to decide whether to begin tapering its commodity-friendly stimulus measures this month. The central bank is scheduled to commence a two-day policy meeting on Sept. 17.
Overseas gold edged below $1,400 an ounce as a delay in possible US military action in Syria and improved economic data from China and Europe boosted the appetite for riskier assets,reducing its appeal as a safe haven.
The rupee,which weakened on Monday,kept the downside in prices limited. The local currency plays an important role in determining the landed cost of the dollar-quoted yellow metal.
In India,the world’s biggest buyer of the metal,traders awaited guidelines from the customs department for supplies to resume after more than five weeks of halt.
Silver for September delivery on the MCX was 1.47 percent lower at 53,995 rupees per kg.
($1 = 66.0700 Indian rupees)