Gold futures tanked more than 1 per cent in the domestic market on Monday tracking weakness in the yellow metal internationally as investors and speculators stuck to a cautious stance ahead of the much anticipated two-day meet of the US Federal Reserve set to begin on Tuesday, in which the world’s top central bank could offer cues over the trajectory of further interest rate hikes.
While the Fed is likely to hold interest rates steady this week its tone over further rate hikes will be keenly watched. The Fed’s meet assumes focus as debate heats up over whether monetary policy has lost its mojo and may do little to revive a flagging global economic recovery and help stabilize market sentiment.
The bullion retreated in the overseas market as a stronger dollar curbed the lure for gold as an alternative asset. Stronger greenback makes gold more expensive for those holding other currencies, thus dimming demand.
Gold may fall today as traders exercise caution ahead of the Fed policy meet and US retail sales data. Read More - “Stock tips”
At the MCX, Gold futures for April 2016 contract closed at Rs 29,187 per 10 gram, down by 1.06 per cent after opening at Rs 29,398, against the previous closing price of Rs 29,500. It touched the intra-day low of Rs 29,126.
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