Diminishing Safe Haven Appeal Weighs on Gold

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Gold futures closed little changed in the domestic market on Friday as investors and speculators stayed cautious over booking fresh positions in the precious metal as a stronger dollar curbed the demand for the bullion as an alternative asset. Stronger bullion makes gold more expensive for those holding other currencies, thus dimming demand.

Diminishing Safe Haven Appeal Weighs on Gold
Meanwhile, Greece and Euro area finance ministers reached a deal to extend the country's bailout accord, curbing safe haven demand for gold.

"We agreed on four months under conditions," Austrian Finance Minister Hans Joerg Schelling said.

Higher equities curbed the demand for the yellow metal as an alternative asset while weak demand from China, the world's second biggest bullion buyer, with markets being shut for a third day on the trot due to the Lunar New Year holidays, also weighed on gold.

Gold may extend a decline today as fears over Greece leaving the euro wane, dimming the need for safe haven assets.

At the MCX, Gold futures for April 2015 contract closed at Rs 26,277 per 10 gram, up by 0.04 per cent after opening at Rs 26,260, against the previous closing price of Rs 26,266 It touched the intra-day high of Rs 26,399 till the closing.

Read more about: gold
Story first published: Monday, February 23, 2015, 12:20 [IST]
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