|Chennai||Rs. 27580.00 (0.18%)|
|Mumbai||Rs. 28700.00 (0%)|
|Delhi||Rs. 27700.00 (0.73%)|
|Kolkata||Rs. 28270.00 (0%)|
|Kerala||Rs. 27050.00 (0.74%)|
|Bangalore||Rs. 27350.00 (1.11%)|
|Hyderabad||Rs. 27660.00 (1.21%)|
Gold prices fell on Tuesday as traders took to the sidelines ahead of a Federal Reserve policy meeting they hope will give greater clarity on the outlook for U.S. monetary policy.
The Fed meets this week amid intense speculation that it may rein in its $85 billion-a-month bond-buying programme after firmer than expected economic data this year and a rally in stock markets.
The programme, part of the Fed's quantitative easing (QE) policy to stimulate U.S. growth, has helped to drive gold prices to record highs in recent years by keeping up pressure on long-term interest rates and stoking inflation fears.
Spot gold was down 0.5 percent at $1,378.14 an ounce at 0929 GMT, while U.S. gold futures for August delivery were down $5 an ounce at $1,378.10.
"Everyone is hoping (Federal Reserve Chairman Ben) Bernanke will shed some light on the uncertainty regarding further bond purchases," Commerzbank analyst Daniel Briesemann said.
"It looks very much like this market doesn't like this uncertainty, but I'm not sure what would be worse for gold: if the Fed says almost nothing, or if they signal an end or reduction to QE. Both would be negative for gold."
The dollar and equities were little changed in early European trade as global financial markets also stuck to tight ranges, with uncertainty about the future of the U.S. monetary stimulus programme keeping investors on edge.
"It will either have to take a materially dovish statement and/or a significant scaling back in the Fed's economic projections for greater upside prospects (for gold) to emerge," UBS said in a note.
INDIAN, CHINESE BUYERS HOLD OFF
Physical demand retreated in India and China, the top two consumers of bullion, from peak levels reached after a steep sell-off in April.
"There is not much buying interest. The sentiment right now is low," said one trader in Hong Kong.
Another Hong Kong trader said that premiums there have fallen to $2 an ounce over London spot prices, from a high of $6 last month. Hong Kong sells mainly to buyers in China.
Any signs of a significant slowdown in the Chinese market would be a big blow to bullion prices because investors expect China to offset slower buying from India.
Demand in India has eased since the government increased import duty on bullion by a third in an effort to reduce its current account deficit.
Among other precious metals, silver was down 0.3 percent at $21.77 an ounce, while spot platinum dipped by 0.3 percent to $1,426.24 an ounce and spot palladium fell 2 percent to $697.97 an ounce.
Platinum group metals, which are chiefly used in catalytic converters, came under pressure after data showed that European car sales last month plunged to their lowest in two decades for the month of May, further eroding manufacturers' hopes of a recovery this year.