Gold prices in India fell today on profit-taking, tracking a decline in global rates. On MCX, April gold prices declined 1.34% or ₹584 to ₹42,996 per 10 gram in their first decline in five days. Over past five days, gold prices had rallied about ₹3,000 per 10 gram, hitting a new high of ₹43,788 in the previous session. Silver prices also declined today, with futures on MCX falling 1.6% to ₹48,580 per kg. A pullback by the rupee to 71.80 against the US dollar also weighed on
Increase in the number of new coronavirus cases outside China over the past few days have bolstered the safe haven appeal of gold. The international spot gold prices have rallied to seven-year highs while India’s domestic gold prices rallied to all-time highs.
In global markets, gold prices fell 1% today on profit-taking after the precious metal hit a seven-year high in the previous session. Spot gold prices fell to $1,642.89 after hitting a multi-year high of $1,688.66 in the previous session. A rise in number of coronavirus cases outside China supported gold on the downside.
Among other precious metals, silver eased about 0.3% to $18.58 per ounce. On the other hand, palladium rose 0.6% to $2,642.97 an ounce, while platinum gained 0.3% to $966.53.
More coronavirus cases outside China and its potential negative impact on global economy will prompt investors to take refuge in safe assets like gold and this may provide support to the metal on the downside, say analysts of Geojit Financial Services Limited in a note.
However, aggressive policy easing measures taken by China to shore up the economy may limit major upside, they added.
Some analysts have ratcheted up bets that the US Federal Reserve will be pressed to cut interest rates to cushion a feared hit to economic growth from the epidemic. Lower interest rates boost the appeal of asset classes like gold that don’t yield any interest. Investors are also pricing in an increased chance the European Central Bank will cut interest rates sooner rather than later amid fears that the coronavirus may hit the euro zone economy hard.
However, prevailing high prices are likely to hit the physical demand of gold in India, analysts say.
Meanwhile, South Korea, Italy and Iran have logged particularly sharp increases in infections and deaths, while several countries in the Middle East reported their first cases of the novel coronavirus.
In China, 508 new cases were reported and although that was up from 409 on Monday it was much lower than new infections being reported just a week ago. China’s death toll reached 2,663 on Tuesday, after 71 more people died. (With Agency Inputs)