This Article is From Mar 03, 2020

Gold Futures Extend Gains As Coronavirus Concerns Boost Safe Haven Appeal

At 11:17 am, gold futures traded 0.26 per cent higher at Rs 42,067.00 per 10 grams, compared with their previous close of Rs 41,956 per 10 grams.

Gold Futures Extend Gains As Coronavirus Concerns Boost Safe Haven Appeal

India is the second largest consumer of gold

Continuing to rise for a fourth session in a row, gold prices moved higher on Tuesday as global equity markets re-assessed the severity of the coronavirus outbreak and its impact on world economy. MCX gold futures rose by as much as Rs 142 per 10 grams - or 0.34 per cent - from their previous close to touch Rs 42,098 per 10 grams before giving up some of those gains in late-morning deals. At 11:17 am, the gold futures contract (delivery on April 3) traded 0.26 per cent (Rs 111.00 per 10 grams) higher at Rs 42,067.00 per 10 grams, compared with its previous close of Rs 41,956 per 10 grams. Analysts said the fear of coronavirus outbreak spreading beyond China and hurting world economy increased the yellow metal's appeal as a safe haven.

According to Mumbai-based industry body IBJA or India Bullion and Jewellers Association, the indicative selling price of gold jewellery stood at Rs 42,140 per 10 grams (excluding GST) in the morning session.

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.

What Analysts Say On Current Gold Rate

Analysts say gold rates may witness some volatility in the near term as investors assess the impact of the coronavirus pandemic on consumer demand.

“COMEX gold traded moderately higher near $1600/oz as global central banks including Federal Reserve, European Central Bank, Bank of Japan and Bank of England expressed willingness to take measures to mitigate the impact of virus outbreak. Weakness in US dollar index due to Fed's rate cut expectations also lent support," said Ravindra Rao, VP-head commodity research at Kotak Securities.

"However, ETF outflows and concerns about consumer demand in India and China weighing on the gold price. Gold may witness choppy trade amid mixed factors however general bias may be on the upside unless virus risks abate,” Mr Rao added.