Gold Price Falls Below Rs 40,000/10 grams; May Continue To Face Volatility

On Thursday, gold futures on MCX were fell as much as 1.5 percent or nearly Rs 600 to Rs 39,141 per 10 grams. It opened at Rs 39,307/10 grams as international prices of the precious metal sank below $1,500 an ounce amid mounting fears over the economic downside from the coronavirus.

Even as various major central banks announced measures to curb the impact of the slowdown in economic activity, it failed to calm the markets across assets classes- from equity to commodities.

On Wednesday, Spot Gold declined to $1,485.06 per ounce and US gold futures fell to $1,488.70. Experts say that the metal is likely to remain volatile on mood-driven swings.

On Thursday, Spot Gold recovered to $1,491.40 an ounce and US gold futures to $1,495.80, however, remain below the $1,500 level.

After the number of coronavirus infection cases and deaths rose to 205,000 and 8,200, respectively, the dollar index jumped to a near three-year high, placing further pressure on gold. Traders are selling precious metals to make up for dramatic losses seen in equity.

In India, despite the rupee's weakness, which hit a record low of 74.95 against the dollar, and high customs duty, gold prices are lower as domestic buyers refrain from making regular purchases amid government-imposed shutdowns.