Fed, US data take severe toll on Bullion
31/10/2014 09:20
Gold futures tumbled in the domestic market on Thursday as investors and speculators exited positions in the precious metal tracking a weak trend in the overseas market as the US Federal Reserve’s decision to end monthly bond purchases dimmed the appeal of the bullion as a hedge against the inflationary risk of monetary stimulus.
Further, better than expected US Q3 GDP data signaled underlying strength in the world’s biggest economy, dimming the safe haven demand for the yellow metal. The US economy grew by an annualized 3.5 per cent in the July-September 2014 quarter, beating estimates of a 3 per cent gain.
Further, 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 amid a slump in investment demand and caution ahead of US personal spending data.
Gold futures for December 2014 contract, at MCX, closed at Rs. 26,603 per 10 grams, down by 1.76 per cent, after opening at Rs. 26,990, against the previous closing price of Rs 27,079. It touched an intra-day low of Rs 26,562.
31/10/2014 09:20
Gold futures tumbled in the domestic market on Thursday as investors and speculators exited positions in the precious metal tracking a weak trend in the overseas market as the US Federal Reserve’s decision to end monthly bond purchases dimmed the appeal of the bullion as a hedge against the inflationary risk of monetary stimulus.
Further, better than expected US Q3 GDP data signaled underlying strength in the world’s biggest economy, dimming the safe haven demand for the yellow metal. The US economy grew by an annualized 3.5 per cent in the July-September 2014 quarter, beating estimates of a 3 per cent gain.
Further, 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 amid a slump in investment demand and caution ahead of US personal spending data.
Gold futures for December 2014 contract, at MCX, closed at Rs. 26,603 per 10 grams, down by 1.76 per cent, after opening at Rs. 26,990, against the previous closing price of Rs 27,079. It touched an intra-day low of Rs 26,562.
