Gold futures notched up marginal gains in the domestic market on Friday amid hopes that the US Federal Reserve may continue to maintain its record easing program to support the economy, bolstering the demand outlook for the bullion, a hedge against the inflationary risk of monetary stimulus. The Federal Reserve Bank of St. Louis President James Bullard said that the Fed should continue with its existing pace of asset purchases.
A slump in Chinese manufacturing this month raised concerns over the global economic recovery, bolstering the demand for the precious metal as a safe haven asset.
However, a decline in investor holdings in gold-backed exchange traded products (ETP) curbed gains in the bullion. Holdings in the SPDR Gold Trust, the biggest bullion-backed ETP, fell to the lowest level since February 2009 at 1,018.57 tons on Thursday.
At the MCX, Gold futures, for the June 2013 contract, are trading at Rs 26,454 per 10 gram, up by 0.05 per cent, after opening at Rs 26,463, against a previous close of Rs 26,440. It touched an intra-day high of Rs 26,537. (At 11:47 AM).