Gold futures succumbed to mild losses in the domestic market on Tuesday as investors and speculators were cautious over booking fresh positions in the precious metal ahead of the minutes from the Fed’s latest meet, set for release on Wednesday, which may offer cues over the timing of a maiden interest rate lift-off since 2006.
Better than expected US housing data which showed that new home construction soared to the highest level in almost eight years in July triggered speculation that the world’s top central bank may raise interest rates in September, dimming the lure for Gold as a store of value.
A stronger dollar also curbed the lure for the bullion as an alternative asset. Stronger greenback makes Gold more expensive for those holding other currencies, thus dimming demand.
However, strong safe haven demand amid a rout in Chinese equities which shed more than 6 per cent of their value amid speculation of reduced state intervention to support the country’s battered stock markets limited the losses in the precious metal.
Gold may trade on a cautious note today as traders await clues over US monetary tightening timing.
At the MCX, Gold futures for October 2015 contract closed at Rs 26,008 per 10 gram, down by 0.09 per cent after opening at Rs 26,059, against the previous closing price of Rs 26,032. It touched the intra-day low of Rs 25,855.