Gold prices in India continued to remain in a tight range today. On MCX, gold futures were up marginally at ₹39,930 per 10 gram. Silver prices however edged lower. Silver futures were down 0.3% to ₹46,102 per kg. Gold had hit a record high of ₹41,300 per 10 gram earlier this month in India amid US-Iran tensions. After coming off highs, gold has remained in a tight range since then.
Gold can dip towards ₹39,600 in near term while taking resistance near ₹40,100 while silver can test ₹45,600 while taking resistance near ₹46,500, SMC Global said in a note.
In global markets, gold prices were steady as fears over the spread of China coronavirus virus supported the safe-haven appeal of gold. Spot gold rates were flat at $1,558.93 per ounce. Silver prices also remained steady at $17.82 per ounce. China has halted travel from Wuhan to stop the spread of a new virus that has already killed 17 and infected hundreds. The coronavirus first appeared last month in this central China city.
Meanwhile, the World Health Organization has delayed a decision on whether to declare the outbreak a public health emergency of international concern. The United Nations agency would meet again Thursday to determine a strategy.
Risk assets were under pressure with Asian shares mostly lower today.
Analysts say that gold may remain choppy as traders assess the fall out from the coronavirus. "If the virus is contained soon or is not seen as a major threat, it may ease market nerves. Apart from development relating to the coronavirus, market focus will be on US economic data and trade related and geopolitical development in Middle East," Kotak Securities said.
Also on the radar of gold traders: the monetary policy statement by European Central Bank. Though the ECB is widely expected to keep benchmark interest rate unchanged, investors will be watching for the bank's outlook for the year.
Back in India, the government will table Union Budget on February 1. The commerce department has sought a reduction in gold import duty, new agency Press Trust of India had earlier reported. Last year, the government had hiked import duty on gold to 12.5% from 10%. Gold prices in India includes import duty and 3% GST.
However, some analysts don't expect the government to lower import duty on gold. "We do not expect government to reduce import duty as it could affect revenues," Kotak Securities said in a note. (With Agency