Today Bullion runs into stronger dollar As on 08 july, 2015

Extending a decline from Monday, the yellow metal fell prey to a steep sell-off with prices tanking more than 1 per cent in the domestic market on Tuesday as a stronger dollar curbed the demand for the bullion as an alternative asset. Stronger greenback makes Gold more costly for those holding other currencies, thus dimming demand. The dollar spiked against a basket of key currencies as investors sought shelter in the safety of the greenback as fears over Greece exiting the euro heightened as European leaders held an emergency summit to decide Greece’s fate in the euro.Bets of Grexit rose after European leaders set a Sunday deadline for Greece to submit a new set of reforms or face the ugly consequences of being pushed out of the common currency.

German chancellor Angela Markel conceded that she wasn’t very optimistic over a solution to Greece’s five-year debt troubles while an event of a Greek exit from the euro threatens to undermine the credibility of the euro that was meant to be irreversible, casting doubts over the strength of the region’s economic, monetary and political integration, prompting an exit from risky assets and bolstering safe haven demand for the US currency. Gold may trade on a subdued note today as traders eye the FOMC minutes which may offer cues over the timing of a maiden rate lift-off since 2006.

At the MCX, Gold futures for August 2015 contract closed at Rs 26,032 per 10 gram, down by 1.12 per cent after opening at Rs 26,276, against the previous Ending price of Rs 26,328. It touched the intra-day low of Rs 25,883 till the closing.