Fed’s Rosengren’s comments support Gold
05/01/2015 09:20
Gold futures closed higher in the domestic market on Friday after a top US Federal Reserve official suggested patience on raising interest rates, bolstering the appeal of the bullion as a store of value. Eric Rosengren, the President of the Boston Federal Reserve said that lack of clear signals of a pickup in inflation and low wage growth justify the exercise of patience over monetary tightening. Meanwhile, the European Central Bank (ECB) is getting ready to undertake sovereign bond purchases as the inflation outlook in the 18-member Euro area deteriorates. Large-scale government bond buying will be bullish for gold, a hedge against the inflationary risk of monetary stimulus. The gains in the yellow metal were curbed by a stronger dollar, which hit an 11-year high against its major rivals, dampening the demand for gold as an alternative asset. Stronger greenback makes gold more expensive for those holding other currencies, thus curbing demand. Gold futures may fall today on the strength of the US dollar. At the MCX, Gold futures for February 2015 contract closed at Rs 26,730 per 10 gram, up by 0.11 per cent after opening at Rs 26,740, against the previous closing price of Rs 26,700. It touched the intra-day high of Rs 26,855 till the closing.
05/01/2015 09:20
Gold futures closed higher in the domestic market on Friday after a top US Federal Reserve official suggested patience on raising interest rates, bolstering the appeal of the bullion as a store of value. Eric Rosengren, the President of the Boston Federal Reserve said that lack of clear signals of a pickup in inflation and low wage growth justify the exercise of patience over monetary tightening. Meanwhile, the European Central Bank (ECB) is getting ready to undertake sovereign bond purchases as the inflation outlook in the 18-member Euro area deteriorates. Large-scale government bond buying will be bullish for gold, a hedge against the inflationary risk of monetary stimulus. The gains in the yellow metal were curbed by a stronger dollar, which hit an 11-year high against its major rivals, dampening the demand for gold as an alternative asset. Stronger greenback makes gold more expensive for those holding other currencies, thus curbing demand. Gold futures may fall today on the strength of the US dollar. At the MCX, Gold futures for February 2015 contract closed at Rs 26,730 per 10 gram, up by 0.11 per cent after opening at Rs 26,740, against the previous closing price of Rs 26,700. It touched the intra-day high of Rs 26,855 till the closing.
