MCX Gold Below ₹40150 Sell 100—500 Lots and Relaxxxx – Neal Bhai

MCX Gold Below ₹40150 Sell 100—500 Lots and Relaxxxx – Neal Bhai The yellowmetal erased thegains it made for 2020, approaching a new low for the calendaryear. Gold on the MCX Index Aprilfutures was trading at Rs 38,751 per 10 gram, down by 1.9% from its previous close.

Mcx gold could trade anywhere between Rs 38,500 and Rs 40,500 for this week. However, it is noteworthy that gold was trading at Rs 31,729 per 10 gram around the same time last year.

Typically, gold shares an inverse relationship with stocks and bonds but that has not been the case so far. According to Chirag Mehta, senior fund manager for alternativeinvestments, Quantum MutualFund, a similar trend was observed during the 2008 financialcrisis. “When there is a sharp fall in asset markets, you can only sell what is ‘liquid’ and ‘profitable’ and hence gold met a temporary sell-off this time, too. But as we have seen before, with the crisis aggravating, demand for gold is expected to dominate any selling pressures, pulling prices higher,” he said.

So far this month, gold has declined by 7.8% and benchmark Sensex has declined by 15.02% due to uncertainty over the impact of the novel coronavirus. Gold prices had risen in the start of the first week of March by 4.9%, however, equitymarkets hitting lower circuits and panic selling across all asset classes have led to gold erasing its gains.

Expects the volatility to continue in the days ahead. “Investors could be selling from gold and all the other asset classes and sitting on cash because they want to remain cautious during uncertain times like this,” he said.

The market will now take its cues from another major centralbank actions scheduled later this month to understand the impact of COVID-19. “If there is a fall akin to the ones last week when you are hitting lower circuits then, that is where the panickicks in. If that happens again, then one might see further liquidation.”

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Neal Bhai has been involved in the Bullion and Metals markets since 1998 – he has experience in many areas of the market from researching to trading and has worked in Delhi, India. Mobile No. - 9899900589 and 9582247600

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