Fed QE taper fears rock gold futures

Fed QE taper fears rock gold futures
Gold futures fell in the domestic market on Thursday as upbeat US economic data strengthened the case for the US Federal Reserve to start slowing its monthly USD 85 billion bond buying program, dimming the appeal of the precious metal, which is a hedge against the inflationary risk of monetary stimulus.

The US economy expanded more than initially estimated last quarter while jobless claims fell by 6,000 to 331,000 last week, signaling a pickup in the world's biggest economy. Gross Domestic Product expanded at an annualized pace of 2.5 per cent in Q2 2013, up from an initial estimate of 1.7 per cent, the Commerce Department said.

Investors remain focused on Syria as a report from New York Times said that the US may go ahead with a military strike against Syria even without Britain's support. Rising geopolitical tensions may increase safe haven inflows into the bullion.

Gold futures for October 2013 contract, at MCX, were trading at Rs. 33,160 per 10 grams, down by 1.46 per cent after opening at Rs. 33,648, against the previous closing price of Rs. 33,650. It touched an intra-day low of Rs 33,090. (At 11:03 AM).

Read more about: gold, qe, fed
Story first published: Friday, August 30, 2013, 12:00 [IST]
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