Gold futures ended lower in the native market on yesterday as investors and traders exited positions in the precious metal tracking weakness in the overseas market as continued strength in the USD curbed the lure for the precious metal as an alternative asset.
Powerfull greenback makes gold more expensive for those holding other currencies, thus dimming demand.Moreover, a renewed slump in oil prices raised fears over world wide deflationary pressures, dimming the appeal of the yellow metal, a hedge against inflation. Prices of Oil slided around 3% on yesterday as a surprise expansion in US(United States) crude oil stockpiles exacerbated fears over a world wide supply glut. Trading volumes were thin with most traders having already closed their books, advanced of the New Year. Losses in the yellow metal were limited by speculation that the US(United States) Fed Reserve may increase interest rates at a gradual pace, supporting gold’s appeal as a store of value.
A surprise drop in US(United States) pending home sales signaled a slowing housing recovery in the world’s biggest economy, lowering the case for a measured pace of interest rate tightening.
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