Thursday, January 21, 2016

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Gold futures Rallied By Almost 2 % in the Domestic Market


Bullions tips - Gold futures rallied by almost 2 per cent in the domestic market on Wednesday, whilst logging their best finish in almost two weeks overseas as plunging oil prices caused a sharp sell-off in global equities, prompting a flight to the safety of the precious metal.
 
Stock markets from Asia to Europe and the US nosedived as oil fell below USD 27 per barrel to a 13-year low after the IEA warned of a worsening supply glut, and as the IMF lowered its global growth outlook amidst a commodity rout, faltering Chinese economy and rising US borrowing costs, forcing investors to shun risky assets, and boosting the safe haven demand for the bullion. Weakness in equities bolstered the appeal of Gold as an alternative asset.  
 
Tepid US inflation data also pared back bets of a further hike in US interest rates in the coming months, bolstering the lure for the bullion as a store of value. US consumer prices declined 0.1 per cent in December after being little changed in November, amidst a commodity slump.
 
Gold may retreat today as traders stay cautious ahead of key US economic 
data including manufacturing, leading index and existing home sales.
 
At the MCX, Gold futures for February 2016 contract closed at Rs 26,559 per 10 gram, up by 1.93 per cent after opening at Rs 26,199, against the previous closing price of Rs 26,057. It touched the intra-day high of Rs 26,658.

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