Gold prices saw a sharp fall today in Indian markets, continuing their recent weakness. On MCX, April gold futures fell 1.4% or about ₹554 to ₹39,169 per 10 gram, their seventh day of decline in eight. Silver however edged higher with futures on MCX rising 0.21% to ₹33,978 per kg. Gold has seen a sharp fall in Indian markets since hitting record high of about ₹45,000 earlier this month, tracking a similar steep decline in global rates.
In global markets, gold prices today dropped 1.4% to $1,465.34 an ounce, also extending losses to the seventh time in eight sessions. So far this year, gold prices are down over 3%, while global stocks have plunged almost 30% and crude oil collapsed by 60%. Among other precious metals, silver was little changed while platinum fell 2.4%.
All asset classes, included gold, have been whipsawed in recent weeks as investors sold the precious metal to cover losses elsewhere. The CBOE Gold ETF Volatility Index, a measure of expectations for price swings, is at the highest since 2008, Bloomberg reported.
The recent measures by the Federal Reserve and European Central Bank have failed to stem market stress.
The Europe’s policy makers on Wednesday launched an extra emergency bond-buying program worth 750 billion euros ($820 billion) to cushion the economy as the continent surpasses China in its number of confirmed cases and deaths.
The economic impact of the coronavirus is still unpredictable and despite the price correction, consumer demand for jewellery may not pick up any time soon, says Abhishek Bansal, chairman and managing director at Abans Group.
But on the downside gold may get some support from a pick-up in investment demand as it is a safe-haven asset and the recent price correction along with lower interest rates, provide an excellent opportunity, he added.
Meanwhile the US dollar has soared to a record high against a basket of other currencies amid mounting concern there will be a global recession because of coronavirus-related shutdown in different parts of the world. Analysts say that investors are preferring the safe haven appeal of the world’s reserve currency (US dollar) against shelter in the precious metal. (With Agency Inputs)