Gold prices continued to decline in domestic markets, extending their recent fall. On MCX, April gold futures fell 2% or about 800 to 38,755 per 10 gram. Gold had shed about 5,000 per 10 gram in previous five sessions, falling from 44,500 levels. Silver also continued to remain under pressure, with futures on MCX down about 5% to 34,500 per kg. In the previous session, silver futures had tumbled over 10% or 4,200 per kg, also following a steep correction in global rates.

Gold is typically viewed as a safe harbour in times of turmoil in global financial markets. But the recent sharp fall in gold prices has been attributed to flight for cash amid heightened volatility across markets over the coronavirus scare.

In global markets, gold prices also fell sharply, extending their recent loss as investors rushed to raise cash amid heightened panic in financial markets over the coronavirus pandemic. Spot gold rates dropped 3% to $1,471 per ounce, after slumping 5% in the previous session.

Among other precious metals, silver fell 4.7% to $12.29, after touching its lowest since 2009 in the last session while platinum lost 3.5% to $639.50. Reflecting the investor sentiment, holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Trust fell 0.2% to 929.84 tonnes on Monday.

"Weak momentum in gold may continue as long as prices stay below $1,535. Immediate support is seen at $1470. However, a close below the same is required to trigger major liquidation pressure. A direct turn above $1545 would take prices higher later," Geojit Financial Services said in a note.

Overnight, Wall Street stocks plunged the most since 1987 after US President Donald Trump warned of a possible recession, with economic disruption from the coronavirus potentially extending into summer.

Asian stock markets, including that in India, were under pressure today. Monetary easing by a wave of global central banks, including the US Federal Reserve, and announcement of fiscal stimulus by various countries across the world has failed to quell investor concerns about the economic hit from the coronavirus.

Many analysts however maintain a positive outlook on gold despite the recent price correction. "The impact of coronavirus raises concerns over a global recession and brings interest rates to zero or lower. Both factors should be bullish for gold," Bonanza Portfolio said in a note to investors. (With Agency Inputs)

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