Gold prices in India were volatile today today after posting strong gains in the previous session. Gold futures on MCX were down 0.06% to ₹43,450 per 10 gram, after trading between ₹43,293 and ₹43,778 during the day. Gold had risen ₹1,544 per 10 gram or 3.6% in the previous session. Silver futures on MCX advanced 0.4% to ₹46,582 per kg. Silver too had surged nearly 3% or ₹1,295 in the previous session. Precious metals, including gold and silver, had rallied in the previous session after US Fed made an emergency rate cut, boosting non-yielding assets like gold. A weaker rupee and higher global rates lifted domestic gold prices.
Domestic gold prices include 12.5% import duty and 3% GST. The rupee today weakened to beyond 73.50 against the US dollar, as compared to the previous close of 73.29. Domestic gold prices had hit a record high of ₹43,788 per 10 gram earlier this month.
In global markets, gold prices continued their upward movement today after sharp gain in the previous session. Spot gold climbed 0.3% to $1,643.76 per ounce. The rate cut by the US Federal Reserve was the US central bank's first outside of a regularly scheduled policy meeting since 2008 at the height of the financial crisis. Lower interest rates reduce the opportunity cost of holding non-yielding gold while weighing on Treasury yields and the dollar, making gold cheaper for those buying in other currencies.
Among other precious metals today, platinum was up 0.9% at $882.50 while silver rose 0.2% to $17.21 an ounce.
Hareesh V, head of commodity at Geojit Financial Services, said: "Gold may edge higher further as investors seek safety in gold amid concerns over the global economic slowdown. As coronavirus is now spreading faster outside China and US Fed’s emergency rate cut roiled financial markets, the demand for safe assets like gold will increase."
"As long as prices stay above $1,560 expect buying momentum to continue with stiff resistance is seen at $1,660 followed by $1700. A close below $1545 is required to negate the bullish outlook and take prices lower," he added.
The latest tranche of sovereign gold bonds, which opened for subscription earlier this week, will close on March 6th. The issue price has been fixed at ₹4,260 per gram of gold while those investing and making payment online get a discount of ₹50 per gram. (With Agency Inputs)