Gold prices in India edged lower today amid profit-taking at higher levels and a pullback by the rupee against the US dollar. On MCX, April gold futures declined 0.15% to ₹43,676 per 10 gram. But silver futures edged higher, rising 0.16% to ₹46,198. In the previous session, gold prices had corrected sharply by ₹550 per 10 gram. The rupee today rose to 73.80 per US dollar against previous close of 74.08. In India, gold prices include 12.5% import duty and 3% GST.
In global markets, gold prices today rose after a seeing a steep fall in the previous session. Spot gold rates was up 0.4% at $1,656.37 per ounce after falling nearly 2% in the previous session. Among other precious metals, silver rose 1.3% to $17.08 per ounce while platinum was up 0.8% to $875.37.
Gold can move towards ₹44,000 while taking support near ₹43,500 while silver can rise towards ₹46,800 while taking support near ₹46,200, SMC Global said in a note.
US equity futures today retreated as investors awaited details on stimulus measures to counter the coronavirus impact.
Gold prices have rallied this year in India, hitting a new high of about ₹45,000 per 10 gram earlier this month. The price rally has however hit physical demand of the metal in domestic markets. But investment demand has surged with gold ETFs in India seeing a net inflow of about ₹1,500 crore in February, taking the total asset base to ₹7,926 crore.
Gold traders will watch out for European Central Bank's response to counter to cushion the economic fallout from coronavirus outbreak. ECB head Christine Lagarde today later in the day will participate in a video conference of the EU's 27 leaders to discuss measures to counter the virus impact.
Bank of England today cuts its main interest rate to 0.25%, from 0.75%, to tackle the impact of coronavirus on economy.
Earlier this month, the US Federal slashed its benchmark interest rate in an emergency move. Some market participants are also pricing in a rate cut by the US Federal Reserve later this month. Lower interest rate reduces the opportunity cost of holding non-yielding gold.
Coronavirus raises concerns of a global recession and central banks may loosen their monetary policies to cushion its impact, says Bonanza Portfolio. Both factors should be bullish for gold, it added.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.2% to 962.03 tonnes on Tuesday. (With Agency Inputs)