Gold futures lost sheen on Thursday as investors and speculators cut risky
bets in the precious metal ahead of the US payrolls numbers due later
on Friday which may signal a strengthening labour market recovery in
the world’s biggest economy, hence boosting the case for monetary
tightening in the near-term, dimming the lure for the bullion as a
store of value.
American
employers probably added 220,000 jobs in August, up from 215,000 in
July.
A
stronger dollar also cut the demand for Gold as an alternative asset.
Stronger greenback makes Gold more expensive for those holding other
currencies, thus dimming demand.
However,
Gold, a hedge against the inflationary risk of monetary stimulus was
supported by the ECB’s move to fine-tune its stimulus program
amidst a deteriorating growth and inflation outlook for the
struggling 19-member Euro area economy.
The
ECB raised the share of bonds it can buy to 33 per cent of each issue
from 25 per cent and vowed to expand stimulus if a global financial
rout continues to weigh on the region’s growth and inflation
outlook.
Gold
may trade lower today as traders stick to a cautious approach ahead
of the much anticipated US jobs data for the month of August which
may dictate the timing of a maiden Federal Reserve interest rate hike
since 2006.
At
the MCX, Gold futures for October 2015 contract closed at Rs 26,394
per 10 gram, down by 0.88 per cent after opening at Rs 26,622,
against the previous closing price of Rs 26,629. It touched the
intra-day low of Rs 26,326.
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