Gold and silver prices fell today, extending their sharp decline of the previous session. On MCX, February gold futures fell 0.42% or 169 to 40,073 per 10 gram. In the previous session, gold had declined 0.85% or 345 per 10 gram. Silver futures today on MCX fell 0.32% to 45,329 per kg, after slumping over 3% in the previous session. A stronger rupee also pushed gold prices lower. Apart from coronavirus, gold traders will be focusing on the monetary policy announcement by the US Federal Reserve due later in the day.

Jigar Trivedi, research analyst at Anand Rathi Shares, said: “MCX gold corrected today, continuing with Tuesday's weak momentum. Strong dollar on the back of positive economic data from the US has hurt sentiments. This could be increasing the chances that the Fed would not be dovish and that is weighing on prices."

In global markets, gold prices remained steady at at $1,565.69 per ounce after a sharp fall in the previous session following positive economic data. Silver was also flat at $17.44. Investors remained worried about the economic impact of China's virus outbreak. Asian equities were mixed today.

Meanwhile, the death toll from the coronavirus outbreak in China rose to over 130 while the number of infected rose to nearly 6,000.

Spurred by the safe have demand for gold amid concerns over coronavirus outbreak, the holdings in bullion exchange-traded funds or ETFs has hit the highest level in seven years, according to a Bloomberg report. Worldwide gold holdings in ETFs rose to 2,561.2 tons as of Tuesday, the highest level since January 2013.

So far this month, gold prices are up over 3% in global markets after an 18% jump last year.

Back in India, the government will table the Budget for FY21 on Saturday. In last year's Budget, the government had hiked import duty on gold. Gold prices in India include 3% GST and 12.5% import duty as the country imports bulk of its gold requirement. (With Agency Inputs)

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