Over the past few days, gold prices rose sharply. But gold and silver prices dropped today, following muted global cues and a moderately higher rupee. The precious metal futures saw their first slump in three days. On MCX, April gold futures dropped 0.1% to ₹40,605 per 10 gram. Silver also decreased 0.19% to ₹46,130 per kg. Gold prices in India had posted an increase of ₹500 last week, tracking higher global rates. The rupee today rose fairly to 71.37 against the US dollar. In India, gold prices include 12.5% import duty and 3% GST.
Gold can see some profit-taking at higher levels. April’s gold futures on MCX can sink lower towards ₹40,400 while facing resistance near ₹40,700. Meantime, March silver futures can lower towards ₹45,800 while taking resistance near ₹46,300, SMC Global said in a note.
Coronavirus and Precious Metals
Due to the concerns about the coronavirus, spot gold prices today edged 0.1% higher to $1,572.01 per ounce in global markets. Among other main precious metals, platinum and silver were up 0.2%. Reflecting on the current price trend, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.13% to 916.08 tonnes on Friday.
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In the meantime, Tedros Adhanom Ghebreyesus, general director of the World Health Organization, has warned that while the virus’ spread outside China seemed to be slow, it could accelerate. A WHO-led international expert mission flew to China today to help coordinate a response to the outbreak that has so far infected more than 40,000 people and killed 908 in the country.
Analysts say that though gold is getting support from concerns over the coronavirus, weaker physical demand for gold, particularly, in China is capping gains.
Jigar Trivedi, a research analyst at Anand Rathi Shares, said: “MCX gold on Monday morning has opened with weak undertone due to a positive rupee. The focus will be on Fed chief Jerome Powel’s testimony at the Congress and Senate. The safe-haven demand every week has improved amid the ongoing virus in China. Hence overall, the sentiment is likely to be positive in the yellow metal.”
This week, gold traders will be focusing on the US Federal Reserve chief Jerome Powell’s semi-annual testimony before Congress. This is as the global economy continues its efforts to grapple with the impact of the coronavirus outbreak. Aside from Powell’s testimony, which starts on Tuesday, around half a dozen Fed officials are due to make public comments, ending a relatively quiet period since the January rate decision.
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