Gold futures end flat on robust US data
24/06/2014 09:06
Gold futures ended flat in the domestic market on Monday as investors and speculators stayed cautious over booking fresh positions in the precious metal as robust US economic data signaled a pickup in the recovery in the world’s biggest economy, raising bets that the US Federal Reserve may continue to trim its monthly bond buying program in the coming months, dimming the appeal of the bullion, a hedge against the inflationary risk of monetary stimulus. US manufacturing rose at the fastest pace since May 2010 in June 2014 while existing home sales climbed in May, a sign that the Fed may start raising interest rates sooner than earlier anticipated, dimming the appeal of the bullion as a store of value. However, a weaker dollar boosted the demand for the precious metal as an alternative asset, supporting gold futures. Weaker greenback makes gold cheaper for those holding other currencies, thus boosting demand. Worries over Iraq amid sectarian violence supported gold’s demand as a safe haven asset. Fears that the US may once again become involved in Iraq have increased, threatening the outlook for the US economy. The Iraqi Prime Minister Nuri-al-Maliki agreed to a July 1 deadline for the formation of a new government as it pleads for US assistance to stem insurgency. Gold futures may trade on a cautious note today ahead of key US data including consumer confidence and new home sales which may offer further cues over the health of the country’s economy. Gold futures for August 2014 contract, at MCX, closed at Rs. 27,678 per 10 grams, up by 0.04 per cent, after opening at Rs. 27,616, against the previous closing price of Rs 27,668. It touched an intra-day high of Rs 27,746.
24/06/2014 09:06
Gold futures ended flat in the domestic market on Monday as investors and speculators stayed cautious over booking fresh positions in the precious metal as robust US economic data signaled a pickup in the recovery in the world’s biggest economy, raising bets that the US Federal Reserve may continue to trim its monthly bond buying program in the coming months, dimming the appeal of the bullion, a hedge against the inflationary risk of monetary stimulus. US manufacturing rose at the fastest pace since May 2010 in June 2014 while existing home sales climbed in May, a sign that the Fed may start raising interest rates sooner than earlier anticipated, dimming the appeal of the bullion as a store of value. However, a weaker dollar boosted the demand for the precious metal as an alternative asset, supporting gold futures. Weaker greenback makes gold cheaper for those holding other currencies, thus boosting demand. Worries over Iraq amid sectarian violence supported gold’s demand as a safe haven asset. Fears that the US may once again become involved in Iraq have increased, threatening the outlook for the US economy. The Iraqi Prime Minister Nuri-al-Maliki agreed to a July 1 deadline for the formation of a new government as it pleads for US assistance to stem insurgency. Gold futures may trade on a cautious note today ahead of key US data including consumer confidence and new home sales which may offer further cues over the health of the country’s economy. Gold futures for August 2014 contract, at MCX, closed at Rs. 27,678 per 10 grams, up by 0.04 per cent, after opening at Rs. 27,616, against the previous closing price of Rs 27,668. It touched an intra-day high of Rs 27,746.
