Gold prices in India today failed to hold on to early gains and moved lower on profit-taking at higher levels. On MCX, April gold futures were down 0.62% to ₹43,886 per 10 gram after having surged to ₹44,777. In the previous session on Friday, domestic gold prices had hit record high of ₹44,961 per 10 gram before ending lower. Silver futures on MCX however today tanked nearly 3% or ₹1,300 per kg to ₹45,697 per 10 gram.
In global markets, gold prices today surged above seven-year highs of $1,700 an ounce as investors rushed into the safe-haven assets like gold, driven by turmoil in equity and oil markets. Spot gold surged as much as 1.8% to $1,703.39 an ounce, the highest since December 2012. The gains came as 10-year U.S. Treasury yields plunged below 0.5% to a record low amid the stampede for safer assets. Among other precious metals, silver gained 0.3% to $17.37 per ounces while platinum was down 1.2% to $890.41.
Oil prices today collapsed over 30% after Saudi Arabia slashed its official selling price.
Indicating the risk-off sentiment, investors have already driven holdings in bullion-backed exchange-traded funds or ETFs to a record as the coronavirus hurt the outlook for growth.
After a 18% surge in 2019, gold prices have moved sharply higher this year amid coronavirus crisis and as central banks cut interest rates to try and stem the damage. Goldman Sachs has predicted that prices could top $1,800 an ounce.
After last week’s emergency rate cut by US Federal Reserve, gold traders will track this week’s scheduled policy meeting of the European Central Bank. Lower interest rates benefit non-interest bearing asset classes like gold.
Back in India, a weaker rupee has also helped boost domestic price of gold. Domestic gold prices include 12.5% import duty at 3% GST.
The rally in domestic gold prices from around ₹39,000 per 10 gram at the start of the year to about ₹ ₹45,000 levels has hit physical demand of the metal. The country’s gold imports plunged 41% in February from a year earlier, Reuters reported, citing sources. (With Agency Inputs)