Gold futures fell in the domestic market on Wednesday as investors and speculators booked fresh positions in the precious metal tracking a weak trend in the overseas market as a stronger dollar curbed the lure for the bullion as an alternative asset.Stronger greenback makes gold more expensive for those holding other currencies, thus dimming demand.
Upbeat US economic data signaled strength in the world’s biggest economy, justifying last week’s hike in interest rates, the first since 2006, by the US Federal Reserve, dimming the lure for gold as a store of value.
US consumer spending rose in November, consumer confidence hit the highest level in five months in December, and sales of new homes rose last month, a sign that the American economy is in strong shape as the US Federal Reserve raises borrowing costs.
Gold may trade on a cautious note today amid thin trading volume ahead of tomorrow’s Christmas trading holiday.
At the MCX, Gold futures for February 2016 contract closed at Rs 25,067 per 10 gram, down by 0.73 per cent after opening at Rs 25,222, against the previous closing price of Rs 25,251. It touched the intra-day low of Rs 25,055.
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