Gold, silver prices edge higher on Tuesday as economic fallout from coronavirus cushions support

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March 31, 2020 10:40 AM

Lower interest rates and looser economic policy is likely to benefit gold prices. Market participants will keep an eye on the consumer confidence number from the US

Gold, silverOn MCX, gold June futures were trading just Rs 19 higher at Rs 43,400 per 10 grams while silver May futures were ruling at 40,036 per Kg, up Rs 238 or 0.60 per cent on Tuesday

Gold and silver prices edged higher on Tuesday, but the gains for the commodity remained capped as the US dollar held firm, however economic fallout from fast-spreading coronavirus cushioned some support to bullion, says Navneet Damani, VP- Commodity Research, Motilal Oswal Financial Services. On MCX, gold June futures were trading just Rs 19 higher at Rs 43,400 per 10 grams while silver May futures were ruling at 40,036 per Kg, up Rs 238 or 0.60 per cent on Tuesday. “Lower interest rates and looser economic policy is likely to benefit gold prices. Market participants will keep an eye on the consumer confidence number from the US, weaker than expected number will keep supporting precious metal pack. Broader trend on COMEX could be in the range of $1595-1630 and on domestic front prices could hover in the range of Rs 42,960-43,800,” Navneet Damani further added.

Spot gold was down 0.3 per cent at $1,616.34 an ounce, while US gold futures eased 0.1 per cent to $1,641.20. Palladium gained one per cent to $2,349.90 an ounce. Platinum rose 0.5 per cent to $727.06, but was on track to post its biggest quarterly percentage loss since 2008. However, silver dropped 0.7% to $14.02, and was set to post its worst quarter since 2013, Reuters reported.

Prices likely to continue with positive bias-

Analysts say that monetary and fiscal stimulus measures taken by various central banks to protect from the possible economic fallout may lift gold’s safe haven demand. “Increased anxiety on risky asset prompted investors to seek shelter in safe haven like gold. Meanwhile, a strong dollar and moderate physical activities due to government tightened lockdowns likely to limit major buying interest in the commodity.” He further added saying that prices are likely to continue with mild positive bias as long as $1585 hold the downside. “For the intraday, resistance is seen at $1635 which needs to be cleared to trigger further sharp rallies,” Hareesh V, Commodity Research at Geojit Financial Services, said.

Meanwhile, global markets were trading higher as US President Donald Trump followed last week’s massive fiscal stimulus package by extending his stay-at-home guidelines, leaving investors to await more signs on the next stages of a deepening economic crisis. Dow Jones Industrial Average gained 2.23% to end at 22,118.98, the S&P 500 was up 2.60%, at 2,607.53 and the Nasdaq Composite was up 2.94%, at 7,722.94. Back home, Indian stock market benchmarks Sensex and Nifty, too, rose higher today. S&P BSE Senses was trading 500 points or 1.75 per cent higher at 29,938, while the broader Nifty 50 was ruling at 8,419, up 138 points or 1.67 per cent.

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