Gold futures closed higher in the domestic market on Wednesday as the U.S. dollar held on to a modest rise in the wake of the latest monetary policy update from the Federal Reserve.
The central bank said it left interest rates unchanged in a range of 1%-1.25%, as expected, but upgraded its assessment of the health of the domestic economy, which left the door open for a rate increase at its December meeting.
Higher interest rates increase the cost of storing commodities and make them less attractive for investors seeking better returns across assets. Higher rates may also boost the value of the dollar, which usually moves in the opposite direction of the gold price.
At the MCX, gold futures for December 2017 contract ended at Rs 29214 per 10 grams, up by 0.21 per cent, after opening at Rs 29,150 against a previous close of Rs 29,153. It touched the intra-day high of Rs 29,342.