Sep 15 2010 , Mumbai
Gold futures in India struck a fresh record high of Rs 19,250 per 10grams
on Wednesday afternoon, tracking gains in overseas markets,
breaching the earlier peak of Rs 19,230 struck on Tuesday.
The contract was trading at Rs 19,242 at 12:37 p.m.
Globally, gold was a touch softer, but was seen supported by speculation the U.S. Federal Reserve would soon announce more quantitative easing.
Some signs that the U.S. economic recovery would be stalling in recent weeks has triggered talk in financial markets of further easing.
That has hurt the dollar's exchange rate against other major currencies and helped boost gold -- also used as a hedge against inflation, which is often triggered by ultra-loose monetary policy.
"The jury is still out on the U.S. economy, where it goes from here and what the Fed does in response are the unknowns," a Europe-based gold trader said. "This leg has further to run, we'll see $1,300 before too long."
Spot gold surged more than two percent to a record $1,274.75 an ounce in the previous session, its biggest one-day gain in four months.
U.S. short-term rates remained steady at low levels on Tuesday, anchored by the Fed's determination to keep rates down, making gold attractive.
"Uncertainty in the market prompted investors to buy safe-haven gold, as speculation the Federal Reserve would turn to quantitative easing as early as November weighed on sentiment," ANZ said in a note.
"The dollar also took a hit against other currencies, encouraging investors to turn to alternative safe-haven assets."
Investor unease can be seen in the higher holdings of the SPDR Gold Trust.
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