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Home / Markets / Commodities /  Gold prices today fall sharply for second day in a row, silver rates slump

Gold prices in India fell sharply today in Indian markets, extending losses to the second day. On MCX, April gold futures fell 0.7% or about 300 to 42,480 per 10 gram. The precious metal had fallen 765 per 10 gram in the previous session. Analysts attributed the decline in domestic prices in gold to profit-taking after the recent run-up in prices and a stronger rupee. Tracking gold, silver prices also fell sharply today. On MCX, silver futures fell 1.2% to 47,020 per kg. The rupee today strengthened to 71.77 a dollar as compared to previous close of 71.88. Domestic gold prices include 12.5% import duty and 3% GST.

In global markets, gold prices were higher today as investors favoured safe-haven assets amid the coronavirus scare. Spot gold rates were up 0.5% at $1,643.49 per ounce after having slumped as much as 1.9% in the previous session. Prices on Monday had hit $1,688.66, their highest in more than seven years. Among other precious metals, palladium today slipped 0.5% to $2,685.85 per ounce, while platinum gained 0.3% to $928.48. Silver rose 0.6% to $18.09 per ounce.

Hareesh V, head of commodity at Geojit Financial Services, said: "The rapid spread of coronavirus outside China and its possible negative global economic impact supports gold’s haven demand. Meanwhile, policy easing measures from various central banks to shore up the economy and moderate physical market activities are likely to limit major upside."

"While prices stay above $1,620 expect rallies to continue with stiff resistance is seen at $1,662 followed by $1,695 levels. A close below $1,595 is required to negate the bullish outlook," he added.

The rapid spread of the virus outside China has increased bets for monetary policy easing by global central banks. The US money market futures are now fully pricing in a 0.25 percentage point rate cut by Federal Reserve by June. Lower interest rates boost the appeal of non-interest yielding assets like gold.

Priyanka Shrimankar, research analyst at Bonanza Portfolio, says that hopes of rate cuts by global central banks and a record low US yields has added to buying in bullion.

Indicating the risk-off mood, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund or gold ETF, rose 0.7% to 940.09 tonnes on Tuesday.

Equity markets in Asia were mostly lower after an overnight rout on Wall Street as US health officials on Tuesday warned that they expect the epidemic to spread in the US.

The new coronavirus cases increased today, with total infections in South Korea surging past 1,000 as the death toll increased in Iran. The coronavirus has rapidly spread in parts of Asia, Europe and the Middle East, even as the number of deaths and fresh cases decline at the disease epicentre in China.

China today reported 52 more deaths. The virus has killed 2,715 people and infected over 78,000 in China. In the rest of the world, there have been more than 40 deaths and 2,700 cases. (With Agency Inputs)

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