Bullions Tips - Gold futures surged by over 1 per cent in the domestic market on Friday as a sharp depreciation of the Indian rupee, which tumbled to a two-year low against the greenback, magnified the gains in the yellow metal, which advanced modestly in the overseas market.
The gains in the bullion were curbed by fears that plummeting oil prices which hit a fresh seven-year low may reignite the risk of deflation, denting the appeal of Gold, a hedge against inflation.
Upbeat US economic data amidst a rebound in US wholesale inflation and a pickup in retail sales bolstered the case for the US Fed to raise interest rates for the first time since 2006, this week, dimming the lure for the bullion as a store of value, trimming gains in Gold futures in the overseas market.
While US retail sales climbed by 0.2 per cent in November 2015, the most in four months, producer prices increased the most since June, up by 0.3 per cent in November 2015 from October when they fell 0.4 per cent.
Gold may succumb to fresh losses today as traders remain anxious ahead of the two-day Fed meet that begins tomorrow.
At the MCX, Gold futures for February 2016 contract closed at Rs 25,679 per 10 gram, up by 1.03 per cent after opening at Rs 25,357, against the previous closing price of Rs 25,418. It touched the intra-day high of Rs 25,714.
