Tuesday, August 4, 2015

Yellow metal succumbed to modest losses

The yellow metal succumbed to modest losses in the domestic market on Monday as investors and speculators exited risky bets in Gold as a stronger dollar cut the demand for the bullion as an alternative asset.Stronger greenback makes Gold more Profitable for those holding other currencies, thus dimming demand.However, soft US economic data raised doubts whether the US Federal Reserve will undertake a maiden interest rate lift-off since 2006, this year, supporting the lure for Gold as a store of value, trimming losses in the precious metal.American manufacturing expanded at a slower pace in July; consumer spending gains in June were the smallest since February while construction spending rose the least since January in June, signaling underlying softness in the world’s biggest economy.Meanwhile, the core Personal Consumption Index, the Fed’s preferred inflation gauge rose 0.1 per cent in June from May, while Mounting 1.3 % from June 2014, remaining well below the Fed’s 2 per cent target.Gold may trade on a discreet note today as traders eye US June factory orders numbers.

At the MCX, Gold futures for August 2015 contract closed at Rs 24,761 per 10 gram, down by 0.21 per cent after cracking at Rs 24,818, against the previous ending price of Rs 24,813. It touched the intra-day low of Rs 24,710.

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