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Gold Bulls shine on Fed rate hike delay hopes

By Religare
|

The yellow metal extended a rally during late morning trade in the domestic market on Thursday as deepening worries over a China economic slowdown sparked a sharp sell-off in global equities, boosting safe haven inflows into Gold.

Gold also benefited from dovish Fed minutes which indicated that officials from the world's top central bank may not raise interest rates in September as inflation shows little signs of moving towards the targeted levels while heightened global financial market volatility also threatens to weigh on the world's biggest economy.

 

While the Fed stressed that conditions which warrant rate tightening are approaching, policymakers are seeking more evidence of a pickup in economic growth and labour markets and need more confidence that inflation is moving towards the required goal.

Gold, a non-interest bearing asset, benefits in a loose monetary policy scenario as low interest rates boost the bullion's appeal as a store of value.

At the MCX, Gold futures for October 2015 contract is trading at Rs 26,412 per 10 gram, up by 0.82 per cent after opening at Rs 26,200, against the previous closing price of Rs 26,196. It touched the intra-day high of Rs 26,467. (At 11:56 AM).

Story first published: Thursday, August 20, 2015, 23:00 [IST]
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