Gold succumbed to a significant sell-off during noon trade in the domestic market on Friday as a sharp rebound in growth in the world's biggest economy bolstered the case for the US Fed to begin tightening of interest rates this year, curbing the lure for Gold as a store of value.
The world's biggest economy expanded at an annualized pace of 2.3 per cent in the June quarter following a revised 0.6 per cent gain in Q1 driven by solid gains in consumer spending. Data today may show a pickup in US consumer sentiment in July and acceleration in business activity, adding to the case for policy tightening.
However, the losses in Gold were trimmed by a weaker dollar which boosted the demand for the yellow metal as an alternative asset. Weaker greenback makes Gold cheaper for those holding other currencies, thus lifting demand.
At the MCX, Gold futures for August 2015 contract is trading at Rs 24,590 per 10 gram, down by 0.52 per cent after opening at Rs 24,668, against the previous closing price of Rs 24,718. It touched the intra-day low of Rs 24,570. (At 12:00 PM).