Global monetary easing lifts yellow metal
25/11/2014 09:30
Gold futures ended higher in the domestic market on Monday as investors and speculators booked fresh positions in the precious metal as central bank moves to ease liquidity conditions in China, Japan and Europe bolstered the appeal of the bullion, a hedge against the inflationary risk of monetary stimulus.
China last week joined Japan and Europe to unleash further monetary stimulus as it cut benchmark rates for the first time since July 2012 even as the European Central Bank promised to take further policy action to stem the threat of deflation in the Euro area.
However, the prospects of a rise in US interest rates next year dimmed the appeal of the bullion as a store of value, curbing gains in the yellow metal. Federal Reserve Bank of Dallas President Richard Fisher said that he isn’t concerned over inflation, raising bets of monetary tightening in the US in the coming months.
Stronger dollar also dimmed the appeal of the yellow metal as an alternative investment. Stronger greenback makes gold more expensive for those holding other currencies, thus dimming demand.
Gold futures may fall today on concerns over US monetary tightening and stronger dollar.
Gold futures for December 2014 contract, at MCX, closed at Rs. 26,480 per 10 grams, up by 0.34 per cent, after opening at Rs. 26,402, against the previous closing price of Rs 26,391. It touched an intra-day high of Rs 26,540.
25/11/2014 09:30
Gold futures ended higher in the domestic market on Monday as investors and speculators booked fresh positions in the precious metal as central bank moves to ease liquidity conditions in China, Japan and Europe bolstered the appeal of the bullion, a hedge against the inflationary risk of monetary stimulus.
China last week joined Japan and Europe to unleash further monetary stimulus as it cut benchmark rates for the first time since July 2012 even as the European Central Bank promised to take further policy action to stem the threat of deflation in the Euro area.
However, the prospects of a rise in US interest rates next year dimmed the appeal of the bullion as a store of value, curbing gains in the yellow metal. Federal Reserve Bank of Dallas President Richard Fisher said that he isn’t concerned over inflation, raising bets of monetary tightening in the US in the coming months.
Stronger dollar also dimmed the appeal of the yellow metal as an alternative investment. Stronger greenback makes gold more expensive for those holding other currencies, thus dimming demand.
Gold futures may fall today on concerns over US monetary tightening and stronger dollar.
Gold futures for December 2014 contract, at MCX, closed at Rs. 26,480 per 10 grams, up by 0.34 per cent, after opening at Rs. 26,402, against the previous closing price of Rs 26,391. It touched an intra-day high of Rs 26,540.
