Monday, August 3, 2015

Dollar weakness helps Bullion regain some lost ground

A weaker dollar on Friday came to the rescue of the yellow metal that has been under severe selling pressure in recent times as fears that the US Federal Reserve is getting ready for the first interest rate hike in nine years soured sentiment in Gold, which becomes less attractive compared to interest-earnings assets in a rising interest rate scenario.A weaker dollar boosted the demand for Gold as an alternative asset. Weaker greenback makes the bullion cheaper for those holding other currencies, thus cracking demand.A bearish close at US equities also helped the bullion’s cause. American stocks marked a bearish close on Friday as investors digested dismal earnings from energy majors Exxon Mobil and Chevron as an oil price rout hit profitability.Looking ahead, US July non-farm payrolls data is due this week with another 200K plus employment growth number likely to raise calls for a rate hike by the Fed in the coming months.Gold may trade on a watchful note today as traders stay jittery ahead of US jobs data on Friday.
At the MCX, Gold futures for August 2015 contract closed at Rs 24,813 per 10 gram, up by 0.38 per cent after opening at Rs 24,668, against the previous closing price of Rs 24,718. It touched the intra-day high of Rs 24,892.
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