Gold Slides to Three-Month Low Ahead of Fed Announcement

Mumbai: Gold prices drifted further to hit a fresh three-month low at the domestic bullion market here on Wednesday owing to sustained speculative selling as well as uneasy overseas sentiment ahead of the Federal Reserve's decision on interest rates.

Industrial metal, silver, too fell back after rallying for two straight sessions due to reduced industrial offtake.

Standard gold (99.5 purity) dropped by Rs 115 to end at Rs 26,850 per 10 grams from overnight level of Rs 26,965. Pure gold (99.9 purity) also fell by a similar margin to end Rs 27,000 per 10 grams compared to Rs 27,115.

Silver (.999 fineness) plunged by Rs 200 to finish at Rs 41,730 per kg against Tuesday's closing level of Rs 41,930.

On the global front, the shiny metal maintained its modest uptrend on short-covering amid speculations that the US central bank would leave interest rates low for a considerable time.

The Fed is expected to make a statement on policy decision later in the day.

Spot gold was bid higher at $1,238.20 in early European trade.