Stronger greenback pulls down bullion
18/11/2014 09:24
Gold futures ended lower in the domestic market on Monday as investors and speculators exited positions in the precious metal as a stronger dollar curbed the demand for the yellow metal as an alternative asset, while falling oil prices dented gold’s appeal as an inflation hedge.
Stronger greenback makes gold more expensive for those holding other currencies, thus dimming demand. Gold also came under pressure after a US Federal Reserve researcher predicted low inflation to stay until the end of 2016.
However, speculation of further easing measures in Europe and Japan supported gold’s appeal as a hedge against the inflationary risk of monetary stimulus, trimming losses in the bullion. While the ECB is considering buying government bonds to shore up the Euro area economy, Japan may boost stimulus after the economy entered a recession.
Gold futures may fall today as investors stay cautious ahead of the release of the FOMC minutes tomorrow.
Gold futures for December 2014 contract, at MCX, closed at Rs. 26,330 per 10 grams, down by 0.51 per cent, after opening at Rs. 26,417, against the previous closing price of Rs 26,466. It touched an intra-day low of Rs 26,300.
18/11/2014 09:24
Gold futures ended lower in the domestic market on Monday as investors and speculators exited positions in the precious metal as a stronger dollar curbed the demand for the yellow metal as an alternative asset, while falling oil prices dented gold’s appeal as an inflation hedge.
Stronger greenback makes gold more expensive for those holding other currencies, thus dimming demand. Gold also came under pressure after a US Federal Reserve researcher predicted low inflation to stay until the end of 2016.
However, speculation of further easing measures in Europe and Japan supported gold’s appeal as a hedge against the inflationary risk of monetary stimulus, trimming losses in the bullion. While the ECB is considering buying government bonds to shore up the Euro area economy, Japan may boost stimulus after the economy entered a recession.
Gold futures may fall today as investors stay cautious ahead of the release of the FOMC minutes tomorrow.
Gold futures for December 2014 contract, at MCX, closed at Rs. 26,330 per 10 grams, down by 0.51 per cent, after opening at Rs. 26,417, against the previous closing price of Rs 26,466. It touched an intra-day low of Rs 26,300.
