Friday, June 3, 2016

MCX Gold Tips: Gold drops prior to Fed meeting
MCX Gold Tips: Gold prices fell as investors remained cautious ahead of this month's Federal Reserve review of interest rates. Investors have digested strong suggestions from the Fed Reserve that it will raise short-term interest rates at some point this summer. Any rate hikes by the Fed this year are viewed as bearish for gold, which struggles to compete with high-yield bearing assets in rising rate environments. Prices also fell as the European Central Bank and OPEC ended a pair of closely-watched meetings on Thu without enacting any major policy changes.

However, a weaker dollar raised the appeal of gold as an alternative asset. Weaker greenback makes the bullion cheaper for those holding other currencies, thus increasing demand.