Gold Regains its Shine on Dovish Yellen comments

Gold futures rebounded in the domestic and overseas market on Tuesday as investors and speculators cheered comments from Fed Chair Janet Yellen who signaled caution over raising interest rates in the near-term amid worries over a global slowdown hurting growth in the world’s biggest economy, bolstering the lure for the yellow metal as a store of value.

 

Yellen called for a slower pace of US interest rate tightening as she stressed that the rate of inflation in the US hasn’t yet proven to be sustainable in the wake of rising global risks that could slow growth in the American economy.

A diminished chance of a Fed rate hike next month sunk the US dollar, bolstering demand for dollar-denominated assets such as Gold. Weaker greenback makes the precious metal cheaper for those holding other currencies, thus bolstering bullion demand. Read More - Mcx Tips

Gold may extend gains today as Fed’s indication of a cautious approach to further US monetary tightening continues to bolster sentiment.

At the MCX, Gold futures for April 2016 contract closed at Rs 28,743 per 10 gram, up by 1 per cent after opening at Rs 28,389, against the previous closing price of Rs 28,458. It touched the intra-day high of Rs 28,782.