12 Sep 2013

MCX Gold futures fall amid QE tapering fears

Gold futures fell in the domestic market on Today as investors and speculators exited positions in the precious metal amid speculation that the US Federal Reserve may start tapering its USD 85 billion monthly bond buying program when it meets next week, dimming the appeal of the precious metal, which is a hedge against the inflationary risk of monetary stimulus. Russia and the US will today meet to discuss a diplomatic solution to the Syria crises by discussing a plan for the country to give up chemical weapons, diminishing the possibility of a military strike, dampening safe haven demand for the yellow metal. 
Sentiment weakened further after Thomson Reuters GFMS said that global gold demand may dip to 2,237 tons in the second half of 2013 from 2,309 tons in the same period a year ago as bar buying declines. Gold futures for October 2013 contract, at MCX, were trading at Rs. 30,565 per 10 grams, down by 0.38 per cent after opening at Rs. 30,551, against the previous closing price of Rs 30,682. It touched an intra-day low of Rs 30,420.

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