Stronger dollar hits Gold even as Fed maintains status
quo
29/01/2015 09:24
Gold futures ended lower in the domestic market on Wednesday as investors and speculators exited positions in the precious metal tracking a weak trend in the overseas market as a stronger dollar curbed the demand for the bullion as an alternative asset. Stronger greenback makes gold more expensive for those holding other currencies, thus dimming demand. Moreover, Chinese gold imports from Hong Kong plunged by a third in 2014, signaling weaker demand for the yellow metal in the world’s biggest gold consumer. Caution ahead of the FOMC policy decision later on Wednesday kept investors on sidelines even amid bets that the Fed may continue with its easy money policy stance against the backdrop of heightened global risks and plunging oil prices that threaten to push inflation further below the 2 per cent goal. Gold may fall today after the Fed raised its assessment of the US economy and job market even as it acknowledged global risks. The apex bank signaled “solid” expansion in the economy, against “moderate” performance seen in December while it saw “strong” job gains compared to “solid” last month. The Fed maintained its pledge to be “patient” over monetary tightening amid rising risks to the world’s biggest economy from a global slowdown. The world’s top central bank said that it will take into consideration “international developments” for deciding when to raise interest rates for the first time since 2006. At the MCX, Gold futures for February 2015 contract closed at Rs 27,759 per 10 gram, down by 0.51 per cent after opening at Rs 27,865, against the previous closing price of Rs 27,902. It touched the intra-day high of Rs 27,935 till the closing.'
29/01/2015 09:24
Gold futures ended lower in the domestic market on Wednesday as investors and speculators exited positions in the precious metal tracking a weak trend in the overseas market as a stronger dollar curbed the demand for the bullion as an alternative asset. Stronger greenback makes gold more expensive for those holding other currencies, thus dimming demand. Moreover, Chinese gold imports from Hong Kong plunged by a third in 2014, signaling weaker demand for the yellow metal in the world’s biggest gold consumer. Caution ahead of the FOMC policy decision later on Wednesday kept investors on sidelines even amid bets that the Fed may continue with its easy money policy stance against the backdrop of heightened global risks and plunging oil prices that threaten to push inflation further below the 2 per cent goal. Gold may fall today after the Fed raised its assessment of the US economy and job market even as it acknowledged global risks. The apex bank signaled “solid” expansion in the economy, against “moderate” performance seen in December while it saw “strong” job gains compared to “solid” last month. The Fed maintained its pledge to be “patient” over monetary tightening amid rising risks to the world’s biggest economy from a global slowdown. The world’s top central bank said that it will take into consideration “international developments” for deciding when to raise interest rates for the first time since 2006. At the MCX, Gold futures for February 2015 contract closed at Rs 27,759 per 10 gram, down by 0.51 per cent after opening at Rs 27,865, against the previous closing price of Rs 27,902. It touched the intra-day high of Rs 27,935 till the closing.'
