Gold prices reversed early gains after rising more than 1 per cent on Monday as domestic equity markets tumbled nearly 13 per cent amid a global selloff continued to spook global peers. MCX gold futures strengthened by Rs 579 per 10 grams - or 1.43 per cent - from their previous close to hit Rs 40,937 per 10 grams at the strongest level of the day, before giving up all of those gains. At 4:38 pm, the gold futures contract (delivery on April 3) was down 0.18 per cent (Rs 73.00 per 10 grams) at Rs 40,285.00 per 10 grams, compared with the previous close of Rs 40,358.00 per 10 grams.
According to Mumbai-based industry body IBJA or India Bullion and Jewellers Association, the indicative selling price of gold jewellery stood at Rs 41,226 per 10 grams (excluding GST) in the first half of the day.
Gold jewellery prices vary in different parts of India - the second largest consumer of the precious metal - due to factors such as excise duty, state taxes and making charges.
#Gold and #Silver Opening #Rates for 23/03/2020#IBJA pic.twitter.com/KaI8dlJYag
In the international market, gold prices edged lower in volatile trade on Wednesday as a flight to cash offset growing hopes for a massive US economic stimulus to stem the coronavirus outbreak's economic toll.
Spot gold was last seen trading 0.3 per cent lower at $1,605.45 per ounce, having risen as much as 1.6 per cent earlier, following a jump of more than 3 per cent in the previous session.
Analysts said the lockdown increased gold's appeal as a safe haven. Domestic equity markets swung between gains and losses amid volatile trade, also making gold a more attractive bet. Typically, gold shares an inverse relation with equities.
Benchmark equity markets benchmarks S&P BSE Sensex and NSE Nifty 50 ended nearly 13 per cent lower as trading resumed after trading was halted at the lower circuit of 10 per cent. The Sensex ended 3,934.72 points - or 13.15 per cent - lower at 25,981.24 and the Nifty shut shop at 7,610.25, down 1,135.20 points (12.98 per cent) from the previous close.
What Analysts Say On Current Gold Rate
Analysts say gold rates may pick up in the near term due to fears the coronavirus outbreak may hamper world economy.
“COMEX gold trades higher near $1495/oz as recent rise in US dollar index came to a halt. Gold also benefited from weakening outlook for major economies and monetary and fiscal measures taken by central banks and governments across the globe. Weaker consumer and investor demand has however kept the gains in a check,” said Ravindra Rao, VP-head commodity research at Kotak Securities.
"Gold may continue to trade in a broad range of $1450-1550/oz amid mixed factors but general bias may be on the downside unless US dollar corrects sharply,” he added.
"It's All Panic!"
"For the time being, gold is not serving as a safe-haven because of margin calls and panic. There is capital outflow from everywhere," said Vandana Bharti, assistant vice-president of commodity research at SMC Comtrade. "(Investors) are winding up their positions. It's not technical or fundamental - it's all panic."
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