MCX Bullions Tips: Gold futures posted impressive gains in the domestic and overseas market on Thursday as turmoil in Asia following a downgrade of Brazil’s credit rating, & a cut in China’s growth forecasts by S&P, coupled with weak data including deepening factory gate deflation in China and a slump in capital spending in Japan led a capital flight from risky assets with traders seeking shelter in the safety of the bullion.
Asian markets plunged on Thursday with stocks in China losing over 1 per cent and that in Hong Kong & Japan shedding over 2 per cent each as S&P cut Brazil’s credit rating to junk while lowering China’s growth predicted for 2016 to 6.3 per cent from 6.6 per cent, and to 6.1 per cent from 6.3 per cent for 2017. Gold is traditionally known to be a good hedge against economic uncertainty.
A weaker dollar also boosted the appeal of Gold as an alternative asset. Weaker greenback makes Gold cheaper for those holding other currencies, thus bolstering demand.
Investors remain focused on the US Fed’s two-day meet on September 16-17, in which the world’s top central bank may offer some cues over when it plans to raise interest rates for the first time since 2006.
Gold may retreat today as caution grips traders ahead of next week’s FOMC meet.
At the MCX, Gold futures for October 2015 contract closed at Rs 26,163 per 10 gram, up by 0.41 per cent after opening at Rs 26,143, against the previous closing price of Rs 26,057. It touched the intra-day high of Rs 26,289.
Asian markets plunged on Thursday with stocks in China losing over 1 per cent and that in Hong Kong & Japan shedding over 2 per cent each as S&P cut Brazil’s credit rating to junk while lowering China’s growth predicted for 2016 to 6.3 per cent from 6.6 per cent, and to 6.1 per cent from 6.3 per cent for 2017. Gold is traditionally known to be a good hedge against economic uncertainty.
A weaker dollar also boosted the appeal of Gold as an alternative asset. Weaker greenback makes Gold cheaper for those holding other currencies, thus bolstering demand.
Investors remain focused on the US Fed’s two-day meet on September 16-17, in which the world’s top central bank may offer some cues over when it plans to raise interest rates for the first time since 2006.
Gold may retreat today as caution grips traders ahead of next week’s FOMC meet.
At the MCX, Gold futures for October 2015 contract closed at Rs 26,163 per 10 gram, up by 0.41 per cent after opening at Rs 26,143, against the previous closing price of Rs 26,057. It touched the intra-day high of Rs 26,289.
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