MCX Bullions Tips : The yellow metal sizzled on Thursday,
advancing nearly 2.5 per cent as Gold regained its safe haven appeal
amid a flight from risky assets as investors fret over the health of the
global economy with China mired in a steep slowdown while emerging
market currencies nosedive.
Stocks from Asia to Europe and the US nosedived on Thursday as deepening
concerns over slowing global growth unnerved traders, souring sentiment
in equities and risky emerging market assets, boosting the safe haven
demand for the precious metal. Citigroup cut its global economic growth
forecast for 2015 for a third time to 3.1 per cent from 3.3 per cent
amid currency weakness and China slowdown woes.
A weaker dollar also boosted the demand for Gold as an alternative
asset. Weaker greenback makes the bullion cheaper for those holding
other currencies, thus bolstering demand.
Dovish FOMC minutes suggested the case for a slight pushback in the
policy tightening timetable in the US amidst weakness in inflation,
bolstering the lure for the Bullion as a store of value.
While the Fed stressed that conditions which warrant rate tightening are
approaching, policymakers are seeking more evidence of a pickup in
economic growth and labour markets and need more confidence that
inflation is moving towards the required goal, before deciding a
lift-off in interest rates for the first time since 2006.
Gold may extend a rally today as a worsening China manufacturing slump
and a steep slide in Asian stocks which hit a 17-month low spur safe
haven demand.
At the MCX, Gold futures for October 2015 contract closed at Rs 26,849
per 10 gram, up by 2.49 per cent after opening at Rs 26,200, against the
previous closing price of Rs 26,196. It touched the intra-day high of
Rs 26,874.
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