Gold Updates - Profit Booking Bites Bullion in the Domestic market

Bullions updates - Gold futures ended with modest losses in the domestic market on Thursday as the sharp gains in the yellow metal in recent sessions gave way to profit booking in the bullion, by investors and speculators, at existing levels.

A rebound in US equities amidst a rally in oil prices also dimmed the safe haven appeal of Gold. The precious metal retreated slightly in the overseas market but the losses were curbed by a weaker dollar which supported the bullion’s appeal as an alternative asset. Weaker greenback makes gold cheaper for those holding other currencies, thus boosting demand.
 

Traders weighed a slightly dovish US Federal Reserve policy statement in which the world’s top central bank underlined the heightened risks to US economic growth amidst global headwinds but stopped short of ruling out further interest rate hikes over the coming months.
 

However, the FOMC signaled a slow pace of policy tightening, auguring well for Gold, a non-interesting bearing asset. The Fed left interest rates unchanged following a maiden hike since 2006 in December. Gold may rise today after the Bank of Japan adopted a negative interest rate to boost the country’s economy.
 

At the MCX, Gold futures for February 2016 contract closed at Rs 26,710 per 10 gram, down by 0.15 per cent after opening at Rs 26,844, against the previous closing price of Rs 26,749. It touched the intra-day low of Rs 26,600.