Gold prices slipped Rs 401 to Rs 44,014 per 10 gram in the Mumbai bullion market on profit booking and weakness in US dollar. Dealers increased discount up to $27-$30, the widest in five months as demand stumbles.
The rate of 10 gram 22-carat gold in Mumbai was Rs 40,317 plus 3 percent GST, while 24-carat 10 gram was Rs 44,014 plus GST. The 18-carat gold quoted at Rs 33,011 plus GST in the retail market.
Kumar Jain, Vice President Mumbai Jewellers Association, told Moneycontrol that gold prices may touch Rs 50,000 by Gudi Padwa or Akshaya Tritiya as the spread of coronavirus affected global economy, Rupee depreciation and easing by central banks.
He further added that there is an old belief that people rush towards gold whenever there is an epidemic like coronavirus or an economic slowdown.
"The yellow metal has crossed $1,690/oz three times in the past but has surpassed $1,700 for the first time on March 9. The overall trend for the yellow metal is positive considering the global scenario. A buy on dip is advised," Sunilkumar Katke, Head of Commodities and Currency at Axis Securities, said.
"Gold prices jumped past the $1,700 level for the first time since late 2012, as a widening coronavirus outbreak and a plunge in crude oil hammered equities and sent investors rushing for safe havens. COVID-19 is showing no signs of getting cured or stopping as it continues to impact people globally", said Navneet Damani, Vice President, Motilal Oswal.
Japan's economy shrank faster than initially estimated in the fourth quarter on a bigger decline in business spending, data showed, casting a deeper shadow over the outlook as the virus hit production and heightened recession risks.
The broader trend on Comex could be $1,655-1,690 and on domestic front prices could hover in the range of Rs 44,100- Rs 44,700, said Damani.
The gold/silver ratio currently stands at 95.67 to 1, which means the amount of silver required to buy one ounce of gold.
Silver prices fell Rs 1,150 to Rs 46,005 per kg from its closing on March 6.
In the futures market, gold rate touched an intraday high of Rs 44,772 and an intraday low of Rs 43,851 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 gained Rs 48, or 0.11 percent on the MCX trading at Rs 44,206 per 10 gram in evening trade in a business turnover of 12,382 lots. Gold contracts for June delivery rose Rs 114, or 0.26 percent, at Rs 44,697 per 10 gram in a business turnover of 13,173 lots.
The value of the April contract traded so far is Rs 7,149.01 crore and June contract saw the value of Rs 936.78 crore.
Similarly, Gold Mini contract for April gained Rs 94, or 0.21 percent at Rs 44,192 in a business turnover of 11,163 lots.
MCX Gold has support at Rs 43,870-43,735 whereas resistance is at Rs 44,410-44,535 levels, according to Motilal Oswal.
The brokerage firm said spot gold will trade in a higher range having support at $1,660-1,648 whereas resistance is at $1,705-1,735.
At 14:46 pm (GMT), spot gold was down marginally $1.33 at $1,673.38 an ounce in London trading.
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