Gold prices fell more than 2 per cent on Wednesday tracking international markets, despite sharp losses in domestic stock markets. MCX gold futures declined by Rs 890 per 10 grams - or 2.21 per cent - from their previous close to hit Rs 39,354 per 10 grams at the weakest level of the day, before trimming some of those losses. At 2:29 pm, the gold futures contract (delivery on April 3) was down 1.92 per cent (Rs 771) at Rs 39,473 per 10 grams, compared with the previous close of Rs 40,244 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 40,750 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.
In the international market, gold erased early gains to fall more than 1 per cent as mounting fears over the economic hit from the coronavirus overshadowed additional stimulus measures by the US and prompted investors to sell precious metals to hoard cash.
Spot gold was last seen trading 1.1 per cent lower at $1,511.72 per ounce.
Analysts said gold prices are taking a breather as weakness in equities worldwide amid concerns about the coronavirus pandemic pushed investors to safer assets such as the yellow metal. Typically, gold shares an inverse relation with equities.
Domestic equity markets plummeted nearly 5 per cent amid volatile trade on Wednesday, as financial stocks led a selloff across sectors. The S&P BSE Sensex plummeted as much as 1,493.35 points to hit 29,085.74 on the downside, and the broader NSE Nifty 50 benchmark dropped to as low as 8,525.50 during the session.
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 moderately higher near $1530/oz after a sharp 2.6% gain yesterday. Gold rebounded sharply after taking support near $1450/oz. Stimulus measures by Fed and other central banks and governments has helped gold recover,” said Ravindra Rao, VP-head commodity research at Kotak Securities.
"However, firmer US dollar index and weaker investor interest has kept price restricted below $1550/oz. Volatility may continue however firmer US dollar may keep pressure on prices,” he added.