Gold climbs after reports of US strikes on ISIS militants

Gold advanced Rs 81 in afternoon trading on the Multi Commodity Exchange of India ( MCX) as overseas spot prices of the metal gained about $10 an ounce after reports the US had launched strikes against ISIS militants in Syria and Israel had brought down a Syrian jet.

Gold for October delivery on the MCX was up at Rs 26,669 per 10 gm. Spot gold overseas rose to $1,225 an ounce.

Gold prices had declined after the US Federal Reserve last week projected that a key interest rate could be raised higher than expected. Although gold gained on Tuesday, analysts expect the bearish overhang to continue.

Suresh Nair, ED at ADMISI Commodities, expects international gold prices to break below $1,200 over the next few weeks as investors move out from gold-backed assets to dollar-backed ones.