Spot gold held steady as nervous investors stayed on the sidelines ahead of the Fed Chairman Bernanke’s testimony in US Congress about the state of US economy and post policy meeting announcement of Bank of Japan. Expectations that the US Federal Reserve could scale back or halt its monthly $85 billion bullion friendly bond buying scheme have influenced gold’s inflation hedge appeal. Prices slipped to $1338 on Monday pressured by strong dollar
and global economic optimism that snapped the appetite for bullion. Also weighing on the sentiments was a rally in US stock market with the Dow and S&P 500, closing at new all time highs enticing more investors into equities. Rating agency Fitch has upgraded Greece’s sovereign credit rating by one notch reducing the risk of possible exit from the Euro zone, boosting economic confidence. At the same time, the holdings of the world’s top exchange traded
fund the SPDR Gold Trust, fell 0.8 percent to 1023.08 tonnes yesterday to the lowest in more than four years. Looking ahead, developments in Indian gold market would be curiously watched out by market onlookers as RBI restricted imports after a surge in physical buying and cooling off festive demand.