Tuesday, July 21, 2015

" Gold may script a small rebound today "

 Against the backdrop of worries over a near-term Fed rate hike, ebbing safe haven demand and a roaring greenback, the yellow metal extended losses from a five-year low, tanking nearly 2 per cent in the domestic market on Monday.Holdings in bullion-backed exchange traded funds fell to the lowest level in nearly seven years, signaling Gold’s fast dimming investment appeal. Assets in the SPDR Gold expectation , the biggest Gold-backed replaced traded fund slumped to the lowest level since September 2008 when the collapse of Lehman Brothers triggered the Great Recession.Hypothesis that the US Federal Reserve will boost interest rates for the first time since 2006, in the coming months as inflation shows signs of picking up and the labour market improves, hurt Gold’s appeal as a store of value, while firing up the dollar, and hence curbing the lure for the bullion as an alternative asset.Atletic greenback makes Gold more profitable for those holding other currencies, thus dimming demand.Meanwhile, easing fears over Greece also cut Gold’s safe haven demand as Greek banks opened following a three-week shutdown while the country made a 2 billion euro repayment to the IMF.Gold may writing a small revive today as steep losses in previous sessions may trigger bargain buying in the metal.At the MCX, Gold futures for August 2015 contract closed at Rs 25,034 per 10 gram, down by 1.82 per cent after opening at Rs 25,475, against the previous closing price of Rs 25,498. It touched the intra-day low of Rs 24,904.

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