The
yellow metal sizzled on Thursday, advancing nearly 2.5 per cent as
Gold regained its safe haven appeal amid a flight from risky assets
as investors fret over the health of the global economy with China
mired in a steep slowdown while emerging market currencies nosedive.
Stocks
from Asia to Europe and the US nosedived on Thursday as deepening
concerns over slowing global growth unnerved traders, souring
sentiment in equities and risky emerging market assets, boosting the
safe haven demand for the precious metal. Citigroup cut its global
economic growth forecast for 2015 for a third time to 3.1 per cent
from 3.3 per cent amid currency weakness and China slowdown woes.
A
weaker dollar also boosted the demand for Gold as an alternative
asset. Weaker greenback makes the bullion cheaper for those holding
other currencies, thus bolstering demand.
Dovish
FOMC minutes suggested the case for a slight pushback in the policy
tightening timetable in the US amidst weakness in inflation,
bolstering the lure for the Bullion as a store of value.
While
the Fed stressed that conditions which warrant rate tightening are
approaching, policymakers are seeking more evidence of a pickup in
economic growth and labour markets and need more confidence that
inflation is moving towards the required goal, before deciding a
lift-off in interest rates for the first time since 2006.
Gold
may extend a rally today as a worsening China manufacturing slump and
a steep slide in Asian stocks which hit a 17-month low spur safe
haven demand.
At
the MCX, Gold futures for October 2015 contract closed at Rs 26,849
per 10 gram, up by 2.49 per cent after opening at Rs 26,200, against
the previous closing price of Rs 26,196. It touched the intra-day
high of Rs 26,874.
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