Fed comments weigh on bullion
18/12/2014 09:20
Gold futures closed lower in the domestic market on Wednesday as investors and speculators exited positions in the precious metal after the US Federal Reserve dropped a pledge to keep interest rates near zero for a “considerable time”, a sign that the world’s top central bank was moving closer to its first rate hike since 2006, dimming the appeal of the bullion as a store of value. The Fed replaced a vow to keep borrowing costs at low levels for a “considerable time” with a commitment to be patient over the timing of raising interest rates even as it raised its outlook over the job market. The Fed is assessing a decline in the unemployment rate against plunging oil prices which may keep inflation well below the Fed’s 2 per cent goal. Fed Chair Janet Yellen said that while she doesn’t see a rate hike in the Fed’s next two meetings, she warned that there is no pre-set time” and “no meeting is off the table.” Muted inflation has also dampened gold’s appeal as an inflation hedge as US consumer prices fell the most since December 2008, down 0.3 per cent in November. Gold futures may rebound today on physical demand after the sharp decline in the previous session. Gold futures for February 2015 contract, at MCX, is trading at Rs. 26,955 per 10 grams, down by 0.88 per cent, after opening at Rs. 27,150, against the previous closing price of Rs 27,194. It touched an intra-day low of Rs 26,915
18/12/2014 09:20
Gold futures closed lower in the domestic market on Wednesday as investors and speculators exited positions in the precious metal after the US Federal Reserve dropped a pledge to keep interest rates near zero for a “considerable time”, a sign that the world’s top central bank was moving closer to its first rate hike since 2006, dimming the appeal of the bullion as a store of value. The Fed replaced a vow to keep borrowing costs at low levels for a “considerable time” with a commitment to be patient over the timing of raising interest rates even as it raised its outlook over the job market. The Fed is assessing a decline in the unemployment rate against plunging oil prices which may keep inflation well below the Fed’s 2 per cent goal. Fed Chair Janet Yellen said that while she doesn’t see a rate hike in the Fed’s next two meetings, she warned that there is no pre-set time” and “no meeting is off the table.” Muted inflation has also dampened gold’s appeal as an inflation hedge as US consumer prices fell the most since December 2008, down 0.3 per cent in November. Gold futures may rebound today on physical demand after the sharp decline in the previous session. Gold futures for February 2015 contract, at MCX, is trading at Rs. 26,955 per 10 grams, down by 0.88 per cent, after opening at Rs. 27,150, against the previous closing price of Rs 27,194. It touched an intra-day low of Rs 26,915
