MCX GOLD TIPS: Gold futures closed on a bullish note in the
domestic market on Wednesday tracking gains from the overseas market as
investors and speculators booked fresh positions in the precious metal
as the US Federal Reserve kept interest rates unchanged near zero even
as it left the door open for policy tightening at its next meet in
December.
Gold benefits from lower interest rates which boost the demand for the yellow metal as a store of value.
The Fed has refrained from rate tightening as a worsening China slowdown
adds to the gloomy global outlook that threatens to crimp US economic
growth and restrain inflation.
However, the Fed on Wednesday indicated that it is confident that
further job gains would be enough to boost inflation towards targeted
levels, supporting the case for a rate lift-off in the near term.
The dollar rallied following the prospects of a December rate hike, reducing the appeal of Gold as a store of value.
Gold may retreat today as the Fed indicated that it is prepared to raise borrowing costs as soon as December.
At the MCX, Gold futures for December 2015 contract closed at Rs 27,073
per 10 gram, up by 0.55 per cent after opening at Rs 26,945, against the
previous closing price of Rs 26,925. It touched the intra-day high of
Rs 27,189.
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