Bullions Tips - Gold futures closed with slim losses in the domestic market on Tuesday as bullion traders stuck to the sidelines ahead of the much anticipated two-day US Federal Reserve monetary policy meet on December 15-16, in which the world’s top central bank is almost certain to lift interest rates for the first time in almost a decade, dimming the lure for the precious metal as a store of value.
Gold, a non-interest bearing asset loses sheen in a rising interest rate scenario.
Plunging oil prices, which hit a seven-year low earlier this week dented gold’s appeal as an inflation hedge while concerns that demand from China, one of the biggest bullion consumers in the world, may weaken early next year amidst a worsening slowdown, indicated by Tuesday’s tepid trade data, also weighed on the yellow metal.
Plunging oil prices, which hit a seven-year low earlier this week dented gold’s appeal as an inflation hedge while concerns that demand from China, one of the biggest bullion consumers in the world, may weaken early next year amidst a worsening slowdown, indicated by Tuesday’s tepid trade data, also weighed on the yellow metal.
However, gold received some support from a global equity sell-off and a weaker dollar which bolstered the appeal of the bullion as an alternative asset. Weaker greenback makes gold cheaper for those holding other currencies, thus bolstering demand.
Gold may trade on a cautious note today amidst speculation of a US rate hike next week. At the MCX, Gold futures for February 2016 contract closed at Rs 25,526 per 10 gram, down by 0.10 per cent after opening at Rs 25,500, against the previous closing price of Rs 25,552. It touched the intra-day low of Rs 25,387.
