Dollar weakness Boosts Yellow Metal In Domestic Market

Gold Updates - Gold futures advanced in the Market on Friday as investors and speculators booked fresh positions in the metal tracking a firm trend in the overseas market as a weaker dollar bolstered the appeal of gold as an alternative asset.Softer greenback makes gold cheaper for those holding other currencies, thus bolstering the demand for the bullion.

The Dollar lost ground after staging an impressive rally in the previous session as the US Federal Reserve raised interest rates for the1st time in almost a decade but signaled a gradual pace of tightening, bringing an end to a prolonged period of uncertainty surrounding the US rate outlook. The Fed exited it’s near-zero interest rate era, raising the target of its federal funds rate to 0.25 per cent to 0.5 per cent, from 0 to 0.25 per cent previously.While higher interest rates may limit gold’s appeal as a store of value, given that the precious metal doesn’t earn any interest, the Fed’s pledge to tighten policy at a measured pace augurs well for gold.
 

Gold also got a boost from plunging equities in the wake of heightened global economic uncertainty which boosted the lure for the bullion as an alternative asset.
 

The Bullion may extend gains today amid safe haven inflows on account of worries over a global economic slowdown.
 

At the MCX, Gold futures for Feb 2016 contract closed at Rs 25,082 per 10 gram, up by 0.97 per cent after opening at Rs 24,871, against the closing price of Rs 24,841. It touched the intra-day high of Rs 25,228.