Firm global cues lift Gold futures higher

Firm global cues lift Gold futures higher
Gold futures ended higher in the domestic market on Wednesday as investors and speculators created fresh positions in the precious metal tracking gains in the overseas market. Gold futures rose in the overseas market on Wednesday as a weaker dollar boosted the demand for the precious metal as an alternative asset. A weaker greenback makes the bullion less expensive for those holding other currencies, thus bolstering demand.

Further, robust physical demand for the bullion in Asia also supported sentiment.

However, speculation that the US Federal Reserve may start scaling back its bond buying program in the near-term as the economy improves dimmed the appeal of the bullion, which is a hedge against the inflationary risk of monetary stimulus. A Fed official said that a modest pullback in QE3 may be justified in a few months' time as the job market and the economy strengthens further.

At the MCX, Gold futures, for the June 2013 contract, ended at Rs 26,630 per 10 gram, up by 0.83 per cent, after opening at Rs 26,481, against a previous close of Rs 26,411. It touched an intra-day high of Rs 26,659.

Read more about: gold futures
Story first published: Thursday, May 30, 2013, 13:30 [IST]
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