Gold extended its gain for the eight consecutive day to touch a new record high of Rs 43,590 per 10 gram in the Mumbai bullion market on news that fatalities over coronavirus continue to rise and on a weak rupee.
The yellow metal is up 11.08 percent so far in 2020, after rising 23.75 percent in 2019 in rupee terms.
The rate of 10 grams 22-carat gold in Mumbai was Rs 39,928 excluding GST, while 24-carat 10 gram was Rs 43,590 plus GST. The 18-carat gold quoted at Rs 32,693 plus GST in the retail market.
"The spike in coronavirus cases beyond China pushed investors to take shelter under the safe-haven metal. Concerns about the spread of coronavirus outside China grew over the weekend with a sharp rise in infections in South Korea, Italy and Iran," Navneet Damani, Vice President, Motilal Oswal, said.
The broader trend on Comex could be $1,640-1,700 while on the domestic front prices could hover in the range of Rs 43,000-43,600, said Damani.
Officials in China are taking measures and are expected to step up policy adjustments to help cushion the blow to its economy from the outbreak.
Silver prices gained Rs 1,430 to Rs 49,035 per kg from its closing on February 20. The gold/silver ratio inched up to 88.89, which refers to the amount of silver required to buy an ounce of gold.
In the futures market, gold touched an intraday high of Rs 43,788 and an intraday low of Rs 42,932 on MCX. For the April series, the yellow metal has seen a low of Rs 37,530 and a high of Rs 43,788.
Gold futures for delivery in April gained Rs 964, or 2.26 percent on the MCX trading at Rs 43,630 per 10 gram in evening trade in a business turnover of 17,562 lots. Gold contracts for June delivery rose Rs 944, or 2.2 percent, at Rs 43,807 per 10 gram in a business turnover of 7,966 lots.
The value of the April contract traded so far is Rs 6,473.42 crore while the June contract saw the value of Rs 273.58 crore.
Similarly, Gold Mini contract for March was up Rs 947, or 2.23 percent at Rs 43,458, in a business turnover of 9,526 lots.
Commenting on the outlook for gold, Axis Securities said gold has immediate support near Rs 43600 levels. "A breakdown below the mentioned level may drag prices lower towards 43,500 levels on intraday basis," it said.
Source: Axis Securities
The broking firm advised its client to sell April Gold below at Rs 43,600 with stoploss at Rs 43,700 and a target of Rs 43,470.
Initial profit booking can be seen in MCX Gold after the recent rally, but the overall bias remains positive and buying on dip is still recommended, said Motilal Oswal.
The broking firm said gold has support at Rs 43,345-43,120 whereas resistance is at Rs 43,765-43,900.
In London trading, spot gold rose $38.95 at $1,682.27 an ounce at 12:46 pm (GMT), .For All Commodities Related News - Click Here