Gold futures ended lower in the domestic market on Thursday as investors
locked into profits earned in the prior session and the People's Bank
of China soothed markets by insisting there is no basis for further
devaluation of the yuan. Sentiment weakened further as the US dollar
regained bite after a top Fed official signaled that the world’s leading
central bank remained on course for an interest rate lift-off in the
near future despite the Yuan devaluation saga, dimming the luster for
the bullion as a store of value. New York Fed President William Dudley
stressed that while the China devaluation move had huge implications for
the global economy, the Fed remains on track for a maiden hike in
policy rates in nine years in the near future, with the exact timing for
policy tightening dependent on the quality of economic data. A stronger
dollar curbs demand for Gold as an alternative asset. Stronger
greenback makes Gold more expensive for those holding other currencies,
thus dimming demand. At the MCX, Gold futures for October 2015 contract
closed at Rs 25,895 per 10 gram, down by 0.46 per cent after opening at
Rs 25,882, against the previous closing price of Rs 26,014. It touched
the intra-day low of Rs 25,835.
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