Safe haven appeal sparks bullion rally
07/01/2015 09:34
Gold futures surged in the domestic and overseas market on Tuesday as investors and speculators booked fresh positions in the precious metal as a slump in global equities amid a deepening oil market rout and concerns over Greece forced investors to shun risky assets and seek shelters in safe havens such as the bullion. A drop in equities boosted the appeal of gold as an alternative investment.
Political turmoil in Greece has raised fears over the country’s exit from the euro as a win of an anti-austerity party in this month’s elections could put Greece’s bailout program in jeopardy, forcing it to default and leave the currency union, an event that threatens to cause a financial catastrophe in Europe.
Further, a slowdown in US manufacturing and services last month signaled cooling American economic growth, raising bets that the US Federal Reserve may hold off hiking borrowing costs in the near-term, bolstering the appeal of the bullion as a store of value.
Gold futures may continue the upward journey today on strong safe haven demand while investors eye FOMC minutes.
At the MCX, Gold futures for February 2015 contract closed at Rs 27,394 per 10 gram, up by 1.32 per cent after opening at Rs 27,100, against the previous closing price of Rs 27,038. It touched the intra-day high of Rs 27,449 till the closing.
07/01/2015 09:34
Gold futures surged in the domestic and overseas market on Tuesday as investors and speculators booked fresh positions in the precious metal as a slump in global equities amid a deepening oil market rout and concerns over Greece forced investors to shun risky assets and seek shelters in safe havens such as the bullion. A drop in equities boosted the appeal of gold as an alternative investment.
Political turmoil in Greece has raised fears over the country’s exit from the euro as a win of an anti-austerity party in this month’s elections could put Greece’s bailout program in jeopardy, forcing it to default and leave the currency union, an event that threatens to cause a financial catastrophe in Europe.
Further, a slowdown in US manufacturing and services last month signaled cooling American economic growth, raising bets that the US Federal Reserve may hold off hiking borrowing costs in the near-term, bolstering the appeal of the bullion as a store of value.
Gold futures may continue the upward journey today on strong safe haven demand while investors eye FOMC minutes.
At the MCX, Gold futures for February 2015 contract closed at Rs 27,394 per 10 gram, up by 1.32 per cent after opening at Rs 27,100, against the previous closing price of Rs 27,038. It touched the intra-day high of Rs 27,449 till the closing.
