Gold prices closed lower in the domestic market on Tuesday as traders weighed comments from Fed officials who suggested that policy tightening in the US may just be round the corner amidst an improvement in the world’s biggest economy, curbing the appeal of the yellow metal as a store of value. San Francisco Federal Reserve Bank President John Williams on Monday strongly backed the case for a hike in borrowing costs sometime later in the year following Fed Chair Janet Yellen’s comments last week when she hinted that the world’s top central bank is in course to raise interest rates for the first time in almost a decade, this year. Meanwhile upbeat consumer spending data also signaled strong progress in the US economy, raising policy tightening bets as household spending climbed 0.4 per cent in August, fueled by a surge in incomes. At the MCX, Gold futures for October 2015 contract closed at Rs 26,243 per 10 gram, down by 0.98 per cent after opening at Rs 26,536, against the previous closing price of Rs 26,504. It touched the intra-day low of Rs 26,211.


Private payrolls in the US probably rose 195,000 in September, up from 190,000 in August, data may show today. Tuesday’s reports also showed that the US economy was weathering a global slowdown as consumer confidence soared to the second highest level in eight years this month and home prices grew at a pace of 5 per cent in the year to July, supporting the case for a lift-off.

Meanwhile, Federal Reserve Bank of Chicago President Charles Evans called for the Fed to maintain its dovish policy stance and refrain from a lift-off in borrowing costs until sometime next year amidst subdued inflation.