Gold Surges On Gains From Safe Haven Lure

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Gold futures finished higher in the domestic market on Monday tracking strong gains in the overseas market as weakness in stocks fostered the appetite of the yellow metal as a safe haven bet.

Concerns over global economic growth remained amid underwhelming US housing data with pending home sales tumbling the most in two years last month and a gauge of business activity falling into contraction, spurring a flight to the safety of the bullion.

Gold Surges On Gains From Safe Haven Lure
Finance Chiefs from the Group of 20 countries which met at Shanghai over the weekend failed to offer any specific measures to boost growth in the current period of heightened financial volatility as concerns over China and a commodity downturn derail the global economic recovery.

With no major policy changes, global growth is likely to meander along, keeping investors interested in safe haven assets such as the yellow metal.

Gold, a hedge against the inflationary risk of monetary stimulus also benefited from China's decision to cut the reserve requirement ratio for banks by 0.5 percentage point.

Gold may extend gains today as dismal China factory data signaled a worsening economic slowdown, bolstering safe haven demand.

At the MCX, Gold futures for April 2016 contract closed at Rs 29,513 per 10 gram, up by 0.60 per cent after opening at Rs 29,409, against the previous closing price of Rs 29,337. It touched the intra-day high of Rs 29,750.

Read more about: gold
Story first published: Tuesday, March 1, 2016, 12:10 [IST]
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