Gold futures rally on ECB decision
07/07/2014 09:15
Gold futures closed higher in the domestic market on Friday as investors and speculators booked fresh positions in the precious metal as the European Central Bank (ECB) maintained its ultra- accommodative monetary policy and stuck to record low interest rates to support the 18-member Euro area economy, bolstering the appeal of the bullion, given that gold is a hedge against the inflationary risk of monetary stimulus. The ECB left unchanged its key benchmark interest rate at 0.15 per cent after cutting it by 10 basis points in June. However, stronger dollar dimmed the appeal of the bullion as an alternative asset, curbing gains in gold futures. Stronger dollar makes the precious metal more expensive for those holding other currencies, thus weighing on demand. Further, speculation that the US Federal Reserve may start raising interest rates sooner than earlier expected after Friday’s upbeat jobs data, dimmed the appeal of the yellow metal as store of value, trimming gains in gold futures. Gold futures may fall today as investors weigh the prospect of earlier than expected monetary tightening in the US amid an improvement in the world’s biggest economy. Gold futures for August 2014 contract, at MCX, closed at Rs. 27,557 per 10 grams, up by 0.34 per cent, after opening at Rs. 27,487, against the previous closing price of Rs 27,464. It touched an intra-day high of Rs 27,595.
07/07/2014 09:15
Gold futures closed higher in the domestic market on Friday as investors and speculators booked fresh positions in the precious metal as the European Central Bank (ECB) maintained its ultra- accommodative monetary policy and stuck to record low interest rates to support the 18-member Euro area economy, bolstering the appeal of the bullion, given that gold is a hedge against the inflationary risk of monetary stimulus. The ECB left unchanged its key benchmark interest rate at 0.15 per cent after cutting it by 10 basis points in June. However, stronger dollar dimmed the appeal of the bullion as an alternative asset, curbing gains in gold futures. Stronger dollar makes the precious metal more expensive for those holding other currencies, thus weighing on demand. Further, speculation that the US Federal Reserve may start raising interest rates sooner than earlier expected after Friday’s upbeat jobs data, dimmed the appeal of the yellow metal as store of value, trimming gains in gold futures. Gold futures may fall today as investors weigh the prospect of earlier than expected monetary tightening in the US amid an improvement in the world’s biggest economy. Gold futures for August 2014 contract, at MCX, closed at Rs. 27,557 per 10 grams, up by 0.34 per cent, after opening at Rs. 27,487, against the previous closing price of Rs 27,464. It touched an intra-day high of Rs 27,595.
