Fed QE exit drags down Bullion
30/10/2014 09:21
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 after the US Federal Reserve decided to end its USD 15 billion monthly bond buying program as the labour market in the world’s biggest economy improves, while the economy withstood recent global financial turmoil, dimming the outlook for the yellow metal, which is a hedge against the inflationary risk of monetary stimulus.
However, the Fed maintained its commitment to keeping borrowing costs at low levels for a “considerable time”, supporting the bullion’s appeal as a store of value.
However, 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.
Gold futures may continue the downward journey today as the Fed wrapped up QE while caution persists ahead of US Q3 GDP data.
Gold futures for December 2014 contract, at MCX, closed at Rs. 27,079 per 10 grams, down by 0.21 per cent, after opening at Rs. 27,187, against the previous closing price of Rs 27,135. It touched an intra-day low of Rs 27,013.
30/10/2014 09:21
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 after the US Federal Reserve decided to end its USD 15 billion monthly bond buying program as the labour market in the world’s biggest economy improves, while the economy withstood recent global financial turmoil, dimming the outlook for the yellow metal, which is a hedge against the inflationary risk of monetary stimulus.
However, the Fed maintained its commitment to keeping borrowing costs at low levels for a “considerable time”, supporting the bullion’s appeal as a store of value.
However, 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.
Gold futures may continue the downward journey today as the Fed wrapped up QE while caution persists ahead of US Q3 GDP data.
Gold futures for December 2014 contract, at MCX, closed at Rs. 27,079 per 10 grams, down by 0.21 per cent, after opening at Rs. 27,187, against the previous closing price of Rs 27,135. It touched an intra-day low of Rs 27,013.
