Gold Price Recovers, Tests Rs 40,000 As Cash Becomes King

Amid increasing uncertainty on the economic effects of the coronavirus pandemic, gold prices remained subdued as investors have been rushing to encash their investments across asset classes.

On MCX, gold futures (April 2020) opened higher at Rs 39,900 per 10 grams and trading 0.7 percent higher at Rs 40,135/10 gram at 10 am on Friday.

In the international markets, spot gold was up by 0.4 percent to $1,475.43 per ounce but was set for a 3 percent decline for the week. US gold futures fell 0.3 percent to $1,474.20 an ounce.

The dollar index jumped to multi-year highs as investors continued to sell their assets to hoard cash.

Funding measures and rate cuts announced by governments and central banks across major economies has not eased concerns of a recession but heightened them.

The US government warned its citizens to return home now or stay abroad indefinitely while unveiling a $1 trillion economic stimulus plan to provide funds directly to businesses and the American public.

The Bank of England promised 200 billion pounds of bond purchases and cut its key interest rate to 0.1 percent, its lowest ever, in a second emergency move.

In Italy, the death toll from the pandemic rose in the last 24 hours by 427 to 3,405, overtaking the total number of deaths registered in Mainland China.

In India, the number of confirmed coronavirus cases have risen to 195, with 4 casualties. On Thursday, PM Modi called for a nationwide 'Janta curfew' asking for all citizens to stay at home between 7 AM to 9 PM on 22 March.

Modi also announced the proposed formation of a Covid-19 economic response task force to be formed under the guidance of finance minister Nirmala Sitharaman. He will also meet with state chief ministers and health ministers on Friday.