Gold and silver prices fell sharply in Indian markets today, tracking muted global cues. On MCX, February gold futures fell 0.85% to 40,630 per 10 gram, after they had surged 1.7% in the previous session. Silver futures prices on MCX also dropped sharply today, falling 1% to 46,439 per kg. In the previous session, silver prices had surged nearly 3%. In global markets, gold rates fell today after data showed Chinese manufacturing and services activity held steady this month.

But concerns over the coronavirus and its economic impact supported gold on the downside. Spot gold prices fell 0.1% to $1,571.77 per ounce though for the month prices are up over 3.5%. Silver fell 0.2% to $17.79.

Overnight, the World Health Organization (WHO) declared the coronavirus a global emergency but the organisation stopped short of recommending restrictions on travel or trade with China. It also said that the measures taken by Beijing can "reverse the tide".

The death toll rose to 213 while confirmed cases in China jumped to 9,692, according to China's health authorities, up from about 7,700 a day earlier.

Back in India, gold traders will be keeping an eye on Union Budget, to be presented tomorrow. The government had last year increased import duty on gold to 12.5% from 10%. According to a Press Trust of India report, the commerce ministry in a proposal has sought a reduction in gold import duty to boost the jewellery sector. Gold prices in India includes 3% GST and 12.5% import duty.

Meanwhile, high prices and a slow economy has hurt gold demand in India. After a 25% gain last year, gold has maintained its momentum in the New Year. Earlier this month, gold hit a new high of 41,293.

However, some analysts expect India's gold demand is expected to rebound this year as the government takes more measures to boost economic growth. (With Agency Inputs)

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