Silver Prices Also Advanced Today – One positive case of coronavirus has been detected in New Delhi, and one has been detected in Telangana, the Indian government said in a statement. “Both the patients are stable and being closely monitored,” it added.
Gold prices in Indian markets extended gains today after two fresh cases of coronavirus were reported in the country. On MCX, gold futures prices rose ₹736 per 10 gram or 1.78 % to ₹42,133. Silver futures rose 2% or ₹950 to to ₹45,350 per kg on MCX. In the previous session, gold had slumped over ₹1,000 per 10 gram, tracking a global selloff. Despite today’s rise, gold rates remain significantly off last week’s record highs of ₹43,788 per 10 gram.
Indian stocks market index Sensex also fell nearly 1,200 points from day’s highs as risk sentiment took a hit after the fresh coronavirus cases were reported.
In global markets, gold prices rebounded today, after a steep 5% fall in the previous session, as coronavirus-driven fears sent investors scurrying for safe havens. Spot gold rates moved 1.2% higher to $1,602.90 per ounce. Other assets considered safe havens were also in spotlight today with benchmark US 10-year Treasury yields falling to a record low, while the yen rose to its highest since October against the US dollar.
Friday’s fall in gold prices were attributed to investors being forced to sell to cover losses in other asset classes like equities.
Among other precious metals, palladium rose 0.7% to $2,610.62 per ounce, platinum gained 1.9% to $880.10 while silver rose 1.3% to $16.88.
“Gold will remain positive due to increased safe haven demand amid economic fears due to the virus outbreak in China, feeble global equities and a weak US dollar. Meanwhile, higher level profit booking and concerns over physical demand from top consumer China and India likely to weigh down the sentiments.”
But an unexpected drop below $1554 could weaken the sentiments, he added.
Factory activity in China contracted at the fastest pace ever in February, raising fears of a global recession from coronavirus.
Analysts say that gold prices would also be supported by expectations of rate cut by US Federal Reserve.
Fed chief Jerome Powell last week had issued a rare statement of reassurance by saying that the US central bank will use “our tools” to support the economy, a strong signal of a coming interest rate cut.
Lower interest rates boost non-yielding asset classes like gold.
Despite coming off from recent highs, gold prices are up significantly this year. “Gold has been shining brightly as Investors seek out the safe haven asset, and price forecast also seems bullish,” said Vinod Nair, Head of Research at Geojit Financial Services. Goldman Sachs Group Inc. has boosted its 12-month gold forecast to $1,800 an ounce.
