Gold prices crossed record high of Rs 44,000 per 10 gram in the domestic retail market on Monday, tracking positive overseas trend from international spot prices that hit a near seven-year high. Investors turned to safe-haven assets such as gold due to rising concerns over the economic impact of coronavirus cases.
Supported by geopolitical worries, gold prices for 24 karat in Delhi, spiked to a record Rs 44,600.00 per 10 gramme.
On the Multi Commodity Exchange, Gold Feb 2020 Futures spurted by another Rs 1,122 or 2.5% to a record high of 43,788 per 10 gm. On a similar note, Silver March contract also surged 281 points or 0.58% to Rs 48,585 per kg.
Overseas, markets extended fall while the yellow metal surged as the spread of coronavirus accelerated with the number of infected cases from the outbreak in South Korea, Italy and the Middle East. Spike in new coronavirus cases in China and elsewhere sent investors scrambling for safer assets such as gold and government bonds, traders said.
Internationally, spot gold jumped 2.5% to a seven-year high of $1,683.94 per ounce. Spot gold had climbed to $1,678.58 earlier in the session. US gold futures rose 1% to $1,665.1 an ounce.
The virus which has killed nearly 2,600 and infected 80,000 was being contained outside China but a spurt of infections and deaths in other countries has fanned fears of a wider outbreak.
Chinese President Xi Jinping on Sunday said the coronavirus epidemic is the country's "largest public health emergency". The death toll from the deadly virus climbed to 2,592 in China on Monday. The sharp spike in infections in Italy and Iran, with South Korea raising its infectious disease alert to its highest level has made investors jittery as whether the virus can be successfully contained. The World Health Organization has also warned about the growing number of cases without any clear link to China.
The International Monetary Fund (IMF) warned Sunday that the deadly coronavirus epidemic could put an already fragile global economic recovery at risk, as G20 financial chiefs discussed ways to contain its economic ripple effects.
Commenting on precious metal's rally today, Hareesh V Head of Commodity at Geojit Financial Services said," Gold's safe haven demand may continue as concerns over more coronavirus cases outside China and its potential negative global growth rate. Meanwhile, aggressive policy easing measures taken by China to shore up the economy and moderate physical market activities likely to limit major upside."
In terms of gold's technical outlook, he further added," While prices stay above $1,620 expect rallies to continue with stiff resistance is seen at $1,680 followed by $1795 levels. A close below $1,595 is required to negate the broad bullish expectation and take prices lower."
The yellow metal is expected to trade with positive bias amid geopolitical worries.