Gold futures closed on a bearish note in the domestic market on Tuesday as investors and speculators exited positions in the precious metal amid concerns over waning demand from China, the world’s second biggest gold buyer, during the Lunar New Year holiday. Record high US equities curbed the demand for Gold as an alternative asset. Philadelphia Federal Reserve President Charles Plosser urged the Fed to ignore the temporary drop in oil prices and low inflation, a sign that monetary tightening in the world’s biggest economy isn’t too far away, dimming the appeal of the bullion as a store of value.
Gold may continue the downward journey amid speculation of weak China demand.