Gold futures slump on Yellen comments

Gold futures slump on Yellen comments
Gold futures tumbled in the domestic market on Wednesday tracking a bearish trend in the overseas market amid speculation that the US Federal Reserve will continue to pare its monthly bond buying program in the coming months, dimming the appeal of the bullion, a hedge against the inflationary risk of monetary stimulus.

Fed Chairman Janet Yellen said that given the considerable underlying strength in the economy, QE tapering in recent months has been appropriate. Yellen did not specify any time table for raising the Fed's key benchmark interest rate as she stressed that inflation and employment remain below the Fed's target.

Easing fears over the crises in Ukraine also dimmed the safe haven appeal of gold. Russian President Vladimir Putin vowed to do everything to defuse the crises in Ukraine and said that Russia has withdrawn its forces from the Ukrainian border.

Gold futures may continue the downward journey amid concerns over continued QE tapering.

Gold futures for June 2014 contract, at MCX, closed at Rs. 28,520 per 10 grams, down by 1.27 per cent, after opening at Rs. 28,943, against the previous closing price of Rs 28,887. It touched an intra-day low of Rs 28,505. Check gold rates here

Read more about: gold futures
Story first published: Thursday, May 8, 2014, 12:40 [IST]
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