Gold futures dip on QE taper bets

Gold futures dip on QE taper bets
Gold futures fell in the domestic market on Friday after a US Federal Reserve official said that the recent progress in the country's labour market warrants a case for tapering the Fed's USD 85 billion monthly bond buying program, dimming the appeal of the precious metal, which is a hedge against the inflationary risk of monetary stimulus.

Federal Reserve Bank of Kansas City President Esther George said that the central bank must slow monthly bond purchases immediately while ended QE by mid-2014.

Robust economic data also boosted the case for a Fed QE taper. The number of Americans who filed for jobless claims fell by 5,000 to 305,000 last week, signaling an improving labour market recovery. The US economy gained steam last quarter as gross domestic product expanded at an annualized pace of 2.5 per cent from Q1, when it grew 1.1 per cent.

Gold futures for October 2013 contract, at MCX, were trading at Rs. 29,781 per 10 grams, down by 0.28 per cent after opening at Rs. 29,809, against the previous closing price of Rs 29,865. It touched an intra-day low of Rs 29,751. (At 10:48 AM).

Dion Global Solutions Ltd.

Story first published: Friday, September 27, 2013, 12:32 [IST]
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