Gold prices trimmed intraday losses on Tuesday to trade flat around Rs 39,250 per gram, as domestic equity markets eked out cautious gains amid weakness in Asian peers on coronavirus fears. MCX gold futures declined by Rs 296 per 10 grams - or 0.75 per cent - from their previous close to hit Rs 39,222 per 10 grams at the weakest level of the day, before recovering most of those losses. At 11:16 am, the gold futures contract (delivery on April 3) was down 0.6 per cent (Rs 237) at Rs 39,281, compared with the previous close of Rs 39,518 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 40,200 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 fell more than 1 per cent, extending losses from a meltdown in the previous session, as investors continued to sell assets to keep their money in cash because of heightened concerns over the economic toll of coronavirus outbreak.
Spot gold was last seen trading 1.1 per cent lower at $1,496.78 per ounce, having slumped as much as 5.1 per cent on the previous day to its lowest since November 2019.
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 rose in volatile trade on Tuesday, mirroring gains in US stock futures amid hopes of further government support to combat the coronavirus outbreak, which has disrupted businesses and stoked fears of a global recession. The Nifty 50 benchmark index has fallen 23 per cent so far this month.
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 $1500/oz after a sharp 2 per cent slide yesterday when it hit the lowest level since Nov.2019. Gold became part of sell-off across all asset classes as market players chose to safety of cash amid increasing risks from the virus outbreak and lack of confidence that monetary easing and fiscal measures will be enough to support global economy,” said Ravindra Rao, VP-head commodity research at Kotak Securities.
"While panic led to a sell-off in all asset classes, buying interest in gold may resume as central banks are likely to continue with easing measures,” he added.