ECB caution weighs on Bullion
22/01/2015 09:21
Gold futures closed lower in the domestic market on Wednesday as investors and speculators exited positions in the precious metal amid caution ahead of the policy meeting of the European Central Bank (ECB) on Thursday where it is widely expected to unleash QE in a bid to help stave off the threat of deflation in the 19-member Euro area economy.
Two ECB officials said that ECB President Mario Draghi has proposed spending 50 billion euro a month or an annual 600 billion euro through December 2016. Markets have been expecting a 550 billion euro sovereign bond buying program. QE is positive for precious metals, which are a hedge against the inflationary risk of monetary stimulus.
Gains in equities curbed the demand for the precious metal as an alternative asset.
Assets in bullion-backed exchange traded products fell for the first time in a week, signaling weak investment demand. Holdings in the SPDR Trust, the biggest gold-backed exchange traded product (ETP) fell from 742.24 tons, the highest since October.
Gold may trade flat today ahead of ECB decision.
At the MCX, Gold futures for February 2015 contract closed at Rs 27,977 per 10 gram, down by 0.38 per cent after opening at Rs 28,049, against the previous closing price of Rs 28,085. It touched the intra-day low of Rs 27,811 till the closing.
22/01/2015 09:21
Gold futures closed lower in the domestic market on Wednesday as investors and speculators exited positions in the precious metal amid caution ahead of the policy meeting of the European Central Bank (ECB) on Thursday where it is widely expected to unleash QE in a bid to help stave off the threat of deflation in the 19-member Euro area economy.
Two ECB officials said that ECB President Mario Draghi has proposed spending 50 billion euro a month or an annual 600 billion euro through December 2016. Markets have been expecting a 550 billion euro sovereign bond buying program. QE is positive for precious metals, which are a hedge against the inflationary risk of monetary stimulus.
Gains in equities curbed the demand for the precious metal as an alternative asset.
Assets in bullion-backed exchange traded products fell for the first time in a week, signaling weak investment demand. Holdings in the SPDR Trust, the biggest gold-backed exchange traded product (ETP) fell from 742.24 tons, the highest since October.
Gold may trade flat today ahead of ECB decision.
At the MCX, Gold futures for February 2015 contract closed at Rs 27,977 per 10 gram, down by 0.38 per cent after opening at Rs 28,049, against the previous closing price of Rs 28,085. It touched the intra-day low of Rs 27,811 till the closing.
