Gold Updates - Yellow Metal Shines On Fed Rate Outlook.

Gold futures jumped by more than 1 per cent in the domestic market on Thursday as investors and speculators booked fresh positions in the precious metal tracking a bullish international trend as a weaker dollar bolstered the lure for the bullion as a store of value while the Fed’s indication that it will raise interest rates more slowly than earlier anticipated boosted the gold’s appeal as a store of value.

 

Weaker greenback makes gold cheaper for those holding other currencies, thus bolstering demand.  The Fed forecast two interest rate hikes of 25 bps each this year down from four previously, as it acknowledged the rising risks to the US economy from global economic and financial weakness.
 

The world’s top central bank kept unchanged its target range for the benchmark federal funds rate between 0.25 to 0.5 per cent and cut its median US growth forecast for 2016 to 2.2 per cent from 2.4 per cent, while that for next year was slashed to 2.1 per cent from 2.2 per cent.
 

Gold may extend gains today as an accommodative money policy from major central banks bolsters gold’s appeal as a hedge against the inflationary risk of monetary stimulus. Read More - Stock Tips
 

At the MCX, Gold futures for April 2016 contract closed at Rs 29,356 per 10 gram, up by 1.35 per cent after opening at Rs 29,185, against the previous closing price of Rs 28,966. It touched the intra-day high of Rs 29,600.