Gold futures closed on a bearish note in the domestic market on Thursday as traders erred on the side of caution ahead of the conclusion of the US Federal Reserve’s two –day monetary policy meet in which the world’s top central bank was set to decide whether to raise interest rates for the first time in almost a decade.
Gold, a non-interest
bearing asset tends to lose its sheen during a rising interest rate
scenario.
While a drop in
jobless claims in the US to the lowest level in two months last week
signaled strong progress in the labour market of the world’s
biggest economy, inflation remains soft with consumer prices falling
0.1 per cent in August 2015 from the previous month, complicating the
task of Fed policymakers as they seek to exit the zero interest rate
policy stance.
Gold futures may
rally today as the Fed held interest rates unchanged near zero amid
concerns that a worsening global economic outlook may restrain growth
in the US economy and suppress already weak inflation, bolstering the
appeal of the yellow metal as a store of value.
At the MCX, Gold
futures for October 2015 contract closed at Rs 26,168 per 10 gram,
down by 0.47 per cent after opening at Rs 26,208, against the
previous closing price of Rs 26,291. It touched the intra-day low of
Rs 26,136.
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