Gold Upadtes - Equity Rebound Dulls Gold’s Appeal

Bullions Tips - Gold futures fell in the domestic market on Thursday as investors and speculators exited positions in the precious metal tracking weakness in the overseas market as a rebound in equities dimmed the investment appeal of the bullion.

Wall Street rallied handsomely on Thursday aided by a relief rally in oil, with the Dow Jones Industrial Average surging 1.41 per cent, the Nasdaq Composite climbing 1.97 per cent and S&P 500 rallying 1.67 per cent.

A stronger dollar also curbed the lure for Gold as an alternative asset. Stronger greenback makes the yellow metal more expensive for those holding other currencies, thus dimming demand. However, the losses in Gold were trimmed by speculation that the US Federal Reserve may go cautious on further interest rate hikes amidst global headwinds, a commodity rout and China slowdown, bolstering the demand for the bullion as a store of value.

Federal Reserve Bank of St. Louis Chief James Bullard said that an energy price rout may dent inflation expectations, tempering speculation of a further interest rate hike by the US Fed for atleast the next few months. Gold may trade on a cautious note today ahead of a flurry of US data including retail sales, industrial output, consumer sentiment and producer prices, which may offer further cues over the health of the world’s biggest economy.

At the MCX, Gold futures for February 2016 contract is trading at Rs 25,637 per 10 gram, down by 0.38 per cent after opening at Rs 25,824, against the previous closing price of Rs 25,735. It touched the intra-day low of Rs 25,591.