Gold prices gained Rs 201 to Rs 43,876 per 10 gm in Mumbai's bullion market on the back of a weak rupee versus the dollar, but the upside was capped by weakness in the global market. Major gold trading centres have been shut due to lockdown announced by state governments to prevent the spread of novel coronavirus, or COVID-19, pandemic.
The rate of 22 and 24-carat gold in Mumbai was Rs 40,190/10 gm plus 3 percent GST and Rs 43,876. 18-carat gold quoted Rs 32,907 plus GST in the retail market.
Silver prices fell Rs 2,100 to Rs 39,500 per kg from its closing on March 27.
Dr Saurabh Gadgil, Managing Director, PNG Jewellers, said worldwide demand for gold is stagnant. "Primarily, gold is holding steady due to the fall in oil prices, the scare around the US economy and concerns over an economic bounce back in many countries."
Compare the yellow metal's present value to the 2008 crisis, Gadgil said gold at that point had shot up at to a record high. "Some analysts are saying it will be similar this time around, with gold prices touching record highs in dollar terms over the next two to three years.”
Navneet Damani, Vice President, Motilal Oswal, too feels weakness in the dollar against major currencies could restrict any major downside for the metal. "The number of coronavirus cases reported in the US have increased sharply and various easing measures announced by the Federal Reserve could support gold prices at lower levels."
Gadgil advised investors be to avoid short-term speculation and to buy gold at regular intervals with a long-term horizon.
For traders, Damani said domestic prices could hover in the range of Rs 43,200-44,100.
In the futures market, gold rate touched an intraday high of Rs 44,190 and a low of Rs 43,212 on the Multi-Commodity Exchange (MCX). In the April series, the yellow metal touched a low of Rs 37,530 and a high of Rs 44,961.
Gold futures for April delivery gained Rs 229, or 0.53 percent, at Rs 43,800 per 10 gm in evening trade. The same for June delivery eased Rs 61, or 0.14 percent, to Rs 43,484 . The far month August contract slipped Rs 161, or 0.37 percent, to Rs 43,407.
The value of the April and June contracts traded so far is Rs 175.54 crore and Rs 1,322.94 crore.
Similarly, Gold Mini contract for April was up Rs 507, or 1.16 percent at Rs 44,097.
At 12:45 pm (GMT), spot gold was down $13.66 at $1,617.62 an ounce in London trading.