Gold and silver prices in India fell sharply today amid a rebound in global equity markets. On MCX, June gold futures fell over ₹1,000 per 10 gram to ₹46,200. Tracking gold, May silver futures plunged 1.7% to ₹43,492 per kg. Gold prices had hit new highs in India this week amid a global rally and weakening rupee, hitting record high of ₹47,327 per 10 gram in the previous session. Rupee had hit a record low of 76.87 against the US dollar on Thursday. Gold prices in India include 12.5% import duty and 3% GST.
Spot gold markets in India remained shut due to lockdown to prevent spreading of coronavirus. The government has extended the lockdown till May 3
In global markets, gold prices inched lower today amid strong traction in global equity markets but fears of a steep global recession capped the precious metal's decline. Spot gold eased 0.1% to $1,716.56 per ounce but is up 1.6% for the week. Among other precious metals, platinum gained 0.4% to $786.30, while silver fell 0.7% to $15.51.
Analysts remain bullish on gold, citing the monetary and fiscal stimulus announced across the world and worries about global recession.
“Gold has seen phenomenal returns in the last calendar year on the back of slowing growth and falling interest rates, but with the Covid-19 coming in to picture followed by shutting down of economies lead to collapse of broader economy. Indian gold prices reached an all-time high, but a large part of this has been driven by depreciating rupee and increased import duty, but international gold prices still are much lower than all-time high and has much room to grow from here," said Kishore Narne, associate director and head commodities and currencies at Motilal Oswal Financial Services.
In terms of technicals, Geojit Financial Services says ongoing positive momentum may continue as long as prices stay above $1702. "Immediate and minor resistance is seen at $1746, a direct break above the same is required to take prices higher to $1,758 followed by $1800 levels," it added.
China today reported economic data for the January to March quarter which while bleak, was better than expected. China reported its economy contracted 6.8% in January-March but it was not as bad as the double-digit declines some analysts had forecast.
US futures were sharply higher today as President Donald Trump proposed guidelines under which U.S. state governors could act to revive the U.S. economy from its coronavirus shutdown in a staggered, three-stage process.
The Indian government's 2020-21 Series I gold bonds will open for subscription from April 20 to April 24. According to timelines for issuance of sovereign gold bonds for the first six months of this fiscal (from April to September), bonds will be issued in six tranches until September.