Gold futures climbed to a record high closing on Friday, as more investors considered this yellow metal as a prospective investment to reap better returns amid uncertain economic conditions. Investors are afraid of stock markets or other riskier bets and thus, a big money is chasing gold. Gold for August delivery added $9.60/oz, or 0.77%, to settle at $1258.30/oz on Friday. Contract also hit a record intra-day high of $1263.70/oz. Gold gained nearly 2.3% during the last week, eighth weekly gains in the last nine weeks. The dollar Index closed break-even with some movements during intra-day on Friday. The dollar index settled the week with more than 2% losses. Equities posted marginal gains on Friday with the benchmark MSCI world index closed 0.23% higher. The SPDR Gold Trust maintained its holdings at 1307.96 MT yesterday. MCX gold also tracked gains in international gold futures but upside was limited due to firm rupee. Indian rupee gained 0.3% to 46.1744 against the dollar. MCX gold ended 0.34% higher at Rs. 18,851/10 gm on Friday. Outlook Gold futures are trading marginally up at $1259.30/oz in Asia while the dollar has taken a dip of nearly 0.5% against the world’s six major currencies. China’s decision to ease the Yuan’s de-facto peg against the US dollar helped commodities markets gain. Currencies of most of the Asian countries may also appreciate with stronger gains for equity markets as well. The Yuan policy shift is bullish for commodities that China imports while bearish for those it exports. Base metals and crude oil may be primary beneficiaries in the commodities’ segment. Gold’s alternative investment demand can be seen during the day as there will be some pressure on the dollar because of China’s decision to make its currency more flexible. Overall firm commodities markets may also impart some gains in bullion prices. However, MCX gold may not see much upside because of heavy appreciation in Indian rupee. MCX gold futures are expected to open lower with limited upside during the day.

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