Gold prices fell by 0.40 per cent on Tuesday as investors readjusted positions ahead of the Federal Reserve's two-day monetary policy meeting due to begin later in the day. The Fed is not expected to take action on interest rates at the conclusion of its two-day policy meeting on Wednesday, but traders will be looking for its take on the global economy and its monetary policy outlook. Gold futures for June 2016 contract, at MCX, were trading at Rs. 29,146 per 10 grams, down by 0.40 per cent after opening at Rs. 29,287 against the previous closing price of Rs. 29,262. It touched the intra-day low of Rs. 29,124 till the trading.
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.
Meanwhile, investors also looked ahead to data on March durable goods orders as well as a report on April consumer confidence due later Tuesday to gauge if the world's largest economy is strong enough to withstand further rate hikes this year.
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