Gold
futures snapped a rally on Tuesday as a sharp rebound in the dollar
made the precious metal less attractive for those holding other
currencies.The yellow metal plunged to end at near a one-week low in
the overseas market on Tuesday as a stronger greenback dimmed the
lure for the bullion as an alternative asset.Worries over China eased
a bit after the country’s central bank unleashed fresh monetary
stimulus to help revive confidence among investors and arrest a steep
rout in equities and help prevent the world’s second biggest
economy from falling off a cliff, curbing the appetite for Gold as a
safe haven asset. China cut interest rates by 25 basis points with
the key lending rate now at 4.6 per cent while the bank reserve ratio
was slashed by 50 basis points.
Meanwhile,
mostly upbeat US economic data including a surge in July new home
sales, solid services growth in August and a jump in consumer
confidence this month signaled the strong progress made by the
world’s biggest economy, backing up the case for an uptick in
interest rates by the Fed sometime this year, dimming the appeal of
Gold as a store of value.Gold
may rebound today as markets in China extended the steepest four-day
rout since 1996 despite fresh policy easing measures.
At
the MCX, Gold futures for October 2015 contract closed at Rs 26,740
per 10 gram, down by 2.60 per cent after opening at Rs 27,300,
against the previous closing price of Rs 27,448. It touched the
intra-day low of Rs 26,662.
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