MCX Bullions Tips: Gold futures closed lower in the domestic market on Tuesday as investors and speculators erred on the side of caution awaiting the outcome of the two-day monetary policy meet of the US Federal Reserve set to kick-off on Wednesday, in which the world’s top central bank will consider raising interest rates from zero, for the first time in nearly a decade.
While the odds for a US rate hike in 2015 remain quite high, the Fed may stop short of raising borrowing costs this week against the backdrop of a China induced global mayhem and tepid US inflation, even as the US job market continues to make strong progress and consumer spending, the backbone of the economy remains in solid shape.
Gold, a non-interest bearing asset tends to lose its sheen during a rising interest rate scenario.
A stronger dollar also curbed the lure for the yellow metal as an alternative asset. Stronger greenback makes Gold more expensive for those holding other currencies, thus dimming demand.
Gold futures may trade on a tepid note today with all eyes fixated on the start of the FOMC meet.
At the MCX, Gold futures for October 2015 contract closed at Rs 25,980 per 10 gram, down by 0.35 % after starting at Rs 26,068, against the previous closing price of Rs 26,070. It touched the intra-day low of Rs 25,940.
While the odds for a US rate hike in 2015 remain quite high, the Fed may stop short of raising borrowing costs this week against the backdrop of a China induced global mayhem and tepid US inflation, even as the US job market continues to make strong progress and consumer spending, the backbone of the economy remains in solid shape.
Gold, a non-interest bearing asset tends to lose its sheen during a rising interest rate scenario.
A stronger dollar also curbed the lure for the yellow metal as an alternative asset. Stronger greenback makes Gold more expensive for those holding other currencies, thus dimming demand.
Gold futures may trade on a tepid note today with all eyes fixated on the start of the FOMC meet.
At the MCX, Gold futures for October 2015 contract closed at Rs 25,980 per 10 gram, down by 0.35 % after starting at Rs 26,068, against the previous closing price of Rs 26,070. It touched the intra-day low of Rs 25,940.
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