Gold rises by Rs 270 per to Rs 41,135 per 10 grams, silver up Rs 380 per kg

Gold prices extended gain for the fifth consecutive day by Rs 270 to Rs 41,135 per 10 grams in Mumbai's bullion market on safe-haven demand and rupee depreciation.

The global economy started off the decade on a firmer footing with a slight rebound in economic activity. This stabilization, however, did not persist for long as new economic headwinds in the form of the Coronavirus outbreak in China emerged. The death toll from the pandemic has already exceeded that of SARS, which hit China in 2002 and cost the global economy a massive $40 billion, said Chirag Mehta, Senior Fund Manager, Alternative Investments, Quantum Mutual Fund.

He also said that the outbreak has fueled concerns over the damage it could cause to the world’s second-largest economy and an engine of global growth.

The rate of 10 grams, 22-carat gold in Mumbai was Rs 37,680 plus 3 percent GST, while that of 10 grams, 24-carat gold was Rs 41,135 plus GST. The price of 18-carat gold quoted at Rs 30,851 plus GST in the retail market.

According to Navneet Damani, Vice President, Motilal Oswal, gold prices eased a bit from its two-week as a monetary policy intervention by China’s central bank to limit the economic impact from the coronavirus outbreak reassured investors and boosted demand for higher-risk assets. He also said that all of these steps and announcements are just to minimize the overall impact of virus on the economy and to calm the markets down.

The virus has claimed more than 1,800 lives and affected more than 73,000 people, also, the situation in Singapore is not getting any better adding to the chaos in market giving support to metal prices.

The broader trend on Comex could be $1,570-1,600, and on domestic front, prices could hover in the range of Rs 40,700-41,350, said Damani.

The gold/silver ratio, which is the amount of silver required to buy one ounce of gold, currently stands at 88.37 to 1.

Silver prices gained Rs 380 to Rs 46,545 per kg from its closing on February 17.

In the futures market, gold rates touched an intraday high of Rs 41,067 and an intraday low of Rs 40,900 on MCX. For the April series, the yellow metal touched a low of Rs 37,530 and a high of Rs 41,567.

Gold futures for delivery in April gained Rs 311, or 0.76 percent on the MCX trading at Rs 41,067 per 10 grams in the evening's trade for a business turnover of 16,663 lots. Gold contracts for delivery in June  rose Rs 307, or 0.75 percent, at Rs 41,235 per 10 grams in a business turnover of 6,638 lots.

The value of the April contracts traded so far is Rs 2,234.90 crore, and those of June contracts saw the value of Rs 121.02 crore.

Similarly, Gold Mini contracts for March was up Rs 254, or 0.62 percent at Rs 40,940 in a business turnover of 8,114 lots.

Axis Securities advised its clients to sell April Gold at Rs 41,050 with stop loss at Rs 41,130 and a target of Rs 40,900.

MCX Gold has support at Rs 40,900-40,720, whereas resistance is at Rs 41,150-41,300, according to Motilal Oswal. The broking firm advised its clients to buy on dips,and targeting resistance at Rs 41,150-41,300 zone.

The brokerage firm said spot gold has support at $1,570 whereas resistance remains at $1,605.

At 12:13 pm (GMT), spot gold rose $6.42 at $1,587.22 an ounce in London trading.

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