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Fed officials' comments, stronger dollar pull down Bullion

By Religare
|

Gold futures ended lower in the domestic market on Monday as investors and speculators exited positions in the precious metal tracking weakness in the overseas market as a stronger dollar curbed the lure for the bullion as an alternative asset.

Stronger greenback makes Gold more expensive for those holding other currencies, thus dimming demand.

Top officials from the Fed stressed that, even as the world's top central bank decided to maintain status quo on monetary policy in September, interest rate tightening is still likely this year, as threat from abroad proves temporary, dimming the lure for Gold as a store of value.

 

Fed officials signaled that strength in the domestic economy may overshadow worries over slowing global growth, opening the door for a maiden rate lift-off since 2006, in either of the Fed's two meetings this year, slated for October & December.

Gold may trade on a cautious note today as traders eye a flurry of US data including home prices, Richmond manufacturing gauge and Fed's Lockhart speech.

At the MCX, Gold futures for October 2015 contract closed at Rs 26,345 per 10 gram, down by 0.47 per cent after opening at Rs 26,487, against the previous closing price of Rs 26,469. It touched the intra-day low of Rs 26,290.

Story first published: Tuesday, September 22, 2015, 12:20 [IST]
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