US rate outlook drags down Bullion
19/12/2014 09:27
Gold futures fell in the domestic market on Thursday as investors and speculators exited positions in the precious metal tracking a weak trend in the overseas market after the US Federal Reserve dropped a vow 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 dip in jobless claims to a six-week low also boosted the case for monetary tightening. Fed signaled that it was on track to raise interest rates next year even as a slump in oil prices threatens the attainment of the Fed’s 2 per cent inflation target.
While Fed Chair Janet Yellen signaled there was little possibility of a rate hike before April, she warned that there is “no pre-set time” and “no meeting is off the table.” A stronger dollar and a surge in equities have also capped the demand for the bullion as an alternative asset.
Gold futures may rebound today amid speculation of a pickup in physical demand.
Gold futures for February 2015 contract, at MCX, is trading at Rs. 26,815 per 10 grams, down by 0.52 per cent, after opening at Rs. 26,999, against the previous closing price of Rs 26,955. It touched an intra-day low of Rs 26,732.
19/12/2014 09:27
Gold futures fell in the domestic market on Thursday as investors and speculators exited positions in the precious metal tracking a weak trend in the overseas market after the US Federal Reserve dropped a vow 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 dip in jobless claims to a six-week low also boosted the case for monetary tightening. Fed signaled that it was on track to raise interest rates next year even as a slump in oil prices threatens the attainment of the Fed’s 2 per cent inflation target.
While Fed Chair Janet Yellen signaled there was little possibility of a rate hike before April, she warned that there is “no pre-set time” and “no meeting is off the table.” A stronger dollar and a surge in equities have also capped the demand for the bullion as an alternative asset.
Gold futures may rebound today amid speculation of a pickup in physical demand.
Gold futures for February 2015 contract, at MCX, is trading at Rs. 26,815 per 10 grams, down by 0.52 per cent, after opening at Rs. 26,999, against the previous closing price of Rs 26,955. It touched an intra-day low of Rs 26,732.
