Gold prices in India fell today after a sharp rise in the previous session, continuing their recent volatile movement. On MCX, April gold futures were down 0.75% to ₹41,900 per 10 gram while June futures slipped 0.4% to ₹42,650. May silver contracts on MCX fell 1.7% to ₹41,003 per kg. April gold futures had surged nearly 2% or ₹800 per 10 gram. After hitting record highs of about ₹45,000 per 10 gram earlier this month, gold prices have seen sharp volatility in India, tracking similar movement in global markets.
In global markets, gold prices fell today as investors again rushed for cash. Asian stock markets were mostly lower today as investors awaited the passage and details of the $2 trillion US stimulus package to combat the economic fallout from the coronavirus. Spot gold fell 0.6% to $1,604.16 per ounce. Among other precious metals, silver was down 0.4% to $14.37 while platinum fell 1.6% to $726.48 an ounce.
Gold prices, in global markets, had surged over 5% on Tuesday – the most in more than a decade – as the precious metal continued to experience big swings in its price movement.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 1.41% to 949.15 tonnes on Wednesday. Meanwhile, new orders for key US-made capital goods fell sharply in February, suggesting a deepening contraction in business investment.
Logistical disruptions and shutdown of refineries caused by the coronavirus pandemic has led to a divergence of prices in New York, London and other parts of the world, with traders worried about getting supply.
Also weighing on gold is concerns about consumer demand as India entered Day 2 of a 21-day nationwide lockdown with spot markets remaining closed. “Weaker demand in India is evident from the wide spread between MCX April and June contract. Domestic gold price is trading at a discount of nearly $40/oz to international price as physical market activity remains low due to virus related restrictions,” Kotak Securities said in a recent note.
“While global asset classes have stabilized, if the virus continues to remain out of spread, it could trigger a push back to cash assets. Gold’s rise from the recent lows has rekindled investor interest and while overall trend looks positive price is still struggling to break and sustain above $1700/ounce level,” the brokerage added. (With Agency Inputs)
