Gold futures dip after strong private jobs data

Posted By: Religare
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Gold futures ended lower in the domestic market on Wednesday as investors and speculators exited positions in the precious metal after robust private payrolls data signaled a pickup in the labour market recovery of the world's biggest economy, raising bets that the US Federal Reserve may continue to trim its monthly bond buying program in the near-term, dimming the appeal of the bullion, a hedge against the inflationary risk of monetary stimulus.

Private payrolls rose 281,000 in June from 179,000 in May, ADP said.

However, the losses in gold were trimmed amid speculation that the US Federal Reserve may stick to low interest rates for a while, bolstering the appeal of the bullion as a store of value. Fed Chairman Janet Yellen said that there was no need to change the current monetary policy.

Gold futures may trade on a cautious note today ahead of the US jobs data which may show that the economy added more than 200,000 jobs last month.

Gold futures for August 2014 contract, at MCX, closed at Rs. 27,663 per 10 grams, down by 0.30 per cent, after opening at Rs. 27,799, against the previous closing price of Rs 27,746. It touched an intra-day low of Rs 27,532.

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