Gold prices moved higher on today as the dollar slid lower, but gains were held in check ahead of the Federal Reserve's policy meeting later in the week. June delivery was at $1232.8 an ounce, up 0.23% from their last settlement. MCX division Gold was up 0.24% to Rs 29090 per 10 grams. The prices tested a high of Rs 29213 per 10 grams and a low of Rs 29072 per 10 grams.
The dollar rose to three-week highs against the yen overnight, but later reversed gains ahead of meeting of the U.S. and Japanese central banks later this week. Investors will be looking at the bank's rate statement for indications on the likelihood of a June interest rate increase after Fed Chair Janet Yellen said recently that the central bank should take a cautious approach towards future rate hikes.
Lower interest rates tend to help gold, as the metal pays its holders nothing, but it struggles to compete with yield-bearing investments when interest rates rise. Gold prices posted their strongest quarterly gains in 30 years in the first quarter of 2016 as global growth concerns and investor uneasiness about negative-interest-rate policies in Japan and Europe bolstered investor appetite for bullion.
Gold's gains have slowed since then but the precious metal is still up almost 17% for the year to date. Elsewhere in precious metals trading, Silver for May delivery was at $16.90 an ounce.
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