Silver and gold rates gained in Indian markets today, lifted by higher global rates. On MCX, February gold futures rose 0.52% to ₹40,560 per 10 gram, extending gains to the third day. Tracking gold, silver also edged higher.
Silver futures on MCX (Multi Commodity Exchange) gained 0.76% to ₹47,291 per kg. In global markets, gold rates rose 0.6% to $1,586 an ounce as concerns over the spread of coronavirus in China spurred investors to buy the safe-haven metal. Worries over the potential impact on global economy has hurt global equity sentiment. On the other hand, Silver jumped 0.9% to $18.24.
China’s health authorities on Sunday said coronavirus transmission ability is getting stronger as the death toll reached 80 and the number of infected rose over 2,000.
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“The increased spread of coronavirus in China has led to a shift from riskier assets to safe havens. The biggest factor in focus at present is the virus outbreak in China which threatens to have a widespread impact on Chinese and global economy. We have already seen a shift from riskier assets to safe haven assets but market nerves may remain frayed unless there are signs that virus can be contained soon,
“However, increasing risks to Chinese economy also threatens to affect consumer demand for gold hence upside movement may be limited. If the spot gold price sustains above $1588 ounce the bulls might target $1600,” he added.
Apart from the progress of the virus outbreak in China, gold traders will also keep a close eye on the US Federal Reserve’s first meeting of this year, scheduled on January 28-29.
Gold demand in many Asian markets, including in India, remained subdued last weak, reports said. In India, Reuters reported, dealers offered discounts of up to $11 an ounce over official domestic prices. Gold prices in India include 12.5% import tax and 3% GST.
Gold dealers were also waiting for the budget, to be presented on February 1, before making large purchases, the report said, citing a dealer. In last year’s budget, the government had raised import tax on gold to 12.5% from 10% earlier.
According to reports, the commerce ministry has sought a reduction in gold import duty to boost the jewellery sector.
spot gold rose by 0.2 percent as worries over a new
coronavirus in the major Chinese cities further boosted the appeal for
the safe haven asset. The coronavirus outbreak in China led to about
25 deaths and the reported cases of infection confirmed were over
830.
The markets expect that newly found virus which has spread in
various nations might impact the global economy which boosted the
demand for the safe haven asset, Gold. However, the World Health
Organization (WHO) didn’t feel the urge to declare a global
emergency over the virus outbreak which limited the uptrend in
prices.
U.S. Treasury Secretary Steve Mnuchin stated that the fresh trade
deals with China, Mexico and Canada could help the U.S. economy
and helped the U.S. Dollar recover in turn pressurizing the yellow
metal prices.
China’s consumption of the precious metal dipped for the first time in
three year in 2019 reflecting from the high Gold prices and an
economic slowdown in the Chinese economy.
Spot silver prices ended lower by 0.19 percent to close
at $17.8 per ounce whereas the MCX silver prices ended marginally
higher by 0.32 percent to close at Rs.46380 per kg.
The new virus outbreak which has spread to various nations might
continue to weigh on the market sentiments and Support Gold prices.