Gold loses sheen as investors look to riskier assets

Updated: Tuesday, July 10, 2012, 15:28 [IST]

Gold Futures lost sheen today, despite surging equities around the globe with analysts now betting more on riskier assets like equities and less on gold.

Dollar has strengthened against many currencies across the globe, which has led to gold dipping marginally. A stronger dollar reduces demand for precious metals, including gold as dollar-priced commodities become expensive.

At 2.30 pm IST, gold for June delivery on the Multi Commodity Exchange (MCX) was trading at Rs 29,562 per 10 grams lower by Rs 131.

Spot gold on MCX was seen up at Rs 29,472 per 10 grams and silver down at Rs 52,223 per kgs.

Domestically, gold of 99.9 and 99.5% purity was at Rs 29,905 and Rs 29,755 per 10 grams, respectively.

Gold is losing demand, as can be witnessed from an AMFI report, wherein gold ETFs saw the highest ever monthly outflow Rs 2,300 crore in June 2012. Pertinently, assets under management of gold ETFs dropped by 2.2% to Rs 10,100 crore in June over the corresponding period of the previous month.

International gold was seen at $1,590 a troy ounce. Globally investors are bearish on the yellow metal and prefer moving out of gold, as there has been a substantial rally in the last one year.

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