Gold prices in India recovered some ground today after falling for three days in a row. On MCX, June gold futures today rose nearly 2% or about ₹850 per 10 gram to ₹46,167 per 10 gram. Last week, gold prices in India had hit a record high above ₹47,000 per 10 gram amid a global rally but later gave up some of the recent gains. Silver prices however edged lower today, sliding 0.15% to ₹41,686 per kg.
In global markets, gold prices rose today as investors sought safe-havens after an historic slump in oil prices exacerbated fears of a global recession, with most countries remaining locked down in the grip of the coronavirus pandemic. Spot gold was up 0.6% at $1,695.05 per ounce.
In the previous session, gold had fallen as much as 2% as investors rushed for cash to cover losses in other asset classes mainly driven by a plunge in oil prices.
Analysts say that flurry of stimulus measures announced across the world will keep gold supported. The US Senate on Tuesday unanimously approved $484 billion in fresh relief for the US economy, sending the measure to the House of Representatives for final passage later this week.
“The outlook for gold has improved significantly in last few months as coronavirus outbreak threatens economic growth forcing central banks and governments to continue with stimulus measures. Akshay Tritiya is usually a high demand period as it is considered auspicious to buy gold. This year we are in a different situation as India is in a lockdown till May 3 so physical demand is likely to be low," said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.
Investor demand for gold continued to rise with turmoil in other asset classes. The holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.37% to 1,033.39 tonnes on Tuesday.
"Gold also benefitted from continuing stimulus measures to support the economy from impact of virus outbreak. ETF inflows also show robust investor interest," Kotak Securities said in a note.
Gold price may witness choppy trade as market players assess the possibility of major economies lifting restrictions against possibility of a spike in infections, the brokerage said.
Volatility in crude oil may also affect gold and other commodities, Kotak Securities added.
Brent crude fell more than 8% to below $18 a barrel today while US oil struggled to hold on to early gains as the coronavirus ravaged energy markets.
(With Agency Inputs)