Gold prices rose Rs 651 to Rs 40,537 per 10 gram in the Mumbai bullion market on rupee depreciation. The yellow metal gained after US Federal Reserve announced liquidity measures to stabilise the economy.
The rate of 10 gram 22-carat gold in Mumbai was Rs 37,131 plus 3 percent GST, while 24-carat 10 gram was Rs 40,537 plus GST. The 18-carat gold quoted at Rs 30,402 plus GST in the retail market.
Kumar Jain, Vice President Mumbai Jewellers Association told Moneycontrol, the jewelers are sitting idle in the showroom despite the recent fall in gold prices. This is because retail customers are scared to step out of homes to shop due to coronavirus. Rumors that the bullion market has also been shut down due to COVID-19 also hit sales.
Goldsmiths are pinning their hope on the upcoming festivals such as Gudi Padwa and Akshay Tritiya to see revival in sales. The recent fall in gold is a good opportunity to buy, added Jain.
“Since the start of this week, there has been a growing awareness about COVID-19 with many events, festivals and celebrations getting postponed and malls getting shut in certain markets. It would be correct to say that people are being cautious when moving around. We see a drop of approximately 20 percent in walk-ins," said Ramesh Kalyanaraman, Executive Director, Kalyan Jewellers.
But Kalyanaraman does not expect a similar revenue hit due to various in-store promotions. "We are hopeful that this is a temporary phenomenon, and things will turn around, before the upcoming season," he said.
According to Navneet Damani, Vice President, Motilal Oswal, gold prices snapped out of the falling trend due to various liquidity boosting measures by the US Fed.
The continuous jump in the count of virus cases, and the negative economic data from the US and other major economies, also supported prices on lower levels, he said.
The broader trend on Comex could be $1,490-1,550 and on the domestic front, prices could hover in the range of Rs 40,000-40,850, Damani said.
The gold/silver ratio that refers to the amount of silver required to buy an ounce of gold, stood at 114.14 to 1.
Silver prices gained Rs 370 to Rs 35,515 per kg from its closing on March 17.
In the futures market, the gold rate touched an intraday high of Rs 40,447 and an intraday low of Rs 39,318 on MCX. For the April series, the yellow metal touched a low of Rs 37,530 and a high of Rs 44,961.
Gold futures for delivery in April eased Rs 525, or 1.3 percent on the MCX trading at Rs 39,719 per 10 gram in evening trade in a business turnover of 7,108 lots. Gold contracts for June delivery slipped Rs 629, or 1.56 percent, at Rs 39,821 per 10 gram in a business turnover of 12,934 lots.
The value of the April contract traded so far was Rs 6,417.86 crore and the June contract saw the value of Rs 839.74 crore.
Similarly, Gold Mini contract for April was down Rs 532, or 1.32 percent at Rs 39,747 in a business turnover of 5,790 lots.
Axis Securities advised its clients to sell April Gold at Rs 40,000 with a stop loss at Rs 40,200 and a target of Rs 39,700.
MCX Gold has intraday resistance at Rs 40,470-40,925 whereas support is at Rs 39,295-38,950 levels, according to Motilal Oswal.
The brokerage firm said spot gold has support at $1,485-1460 whereas resistance is at $1,528-1,545.
At 13:40 pm (GMT), spot gold was down $15.90 at $1,509.90 an ounce in London trading.
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