Spot gold had dropped 0.3 percent to USD 1,244.93 per ounce by 0034 GMT. The metal hit its highest since November 11 at USD 1,263.80 on February 27.
New York Fed President William Dudley, among the most influential US central bankers, said on CNN that the case for tightening monetary policy "has become a lot more compelling" since the election of President Donald Trump and a Republican-controlled Congress.
Unlike country-specific funds which have a longer term view, ETF flows are volatile and could reverse at the first sign of weakness. Also, India‘s performance has to be seen in the context of the rally across emerging markets.
A total of 13 of 21 primary dealers, brokerages that deal directly with the Federal Reserve, say the Fed will next raise rates in the first quarter, after it raised the range of its benchmark interest rate by a quarter of a percentage point to between 0.25 percent and 0.50 percent on Wednesday.
Nipun Mehta, Founder and CEO of Blue Ocean Capital Advisors says the Fed may hike rates from 15 basis points to 25 basis points as far as domestic markets are concerned.
The Federal Reserve will kick off its last policy meet of the year later on Tuesday. At the end of the two-day meet, the US central bank is widely expected to hike interest rates for the first time since June 2006.