Gold prices gained in the domestic market, tracking positive overseas trend from the international spot gold that climbed to a two-week high today. This was on back of increased geopolitical tensions in different parts of the world and slowdown in global economy, prompting investors to move some of their investments to safe haven assets.
Internationally, spot gold prices surged 0.20% to $1,586.60 per ounce, spurred by demand for safe-haven assets as death toll from coronavirus in China moved above 1800.
The Chinese government said death toll from coronavirus outbreak in mainland China rose to 1,868, as of February 17, up by 98 from the previous day.
On the Multi Commodity Exchange, Gold 05 Feb 2020 Futures spurted by another Rs 164 or 0.40% to a record high of 40,920 per 10 gram. It made a high of Rs 40,978 and a low of Rs 40,900.
Retail gold prices for 24 karat in Delhi traded around Rs 41,600 per 10 gram.
On a similar note, silver march contract also surged 0.40% or 187 points to Rs 46,310 per kg.
According to traders, price of the yellow metal rose today as pushed investors towards safe havens over coronavirus concerns and will likely retest Rs 41K mark in the upcoming days.
Moreover, data by Association of Mutual Funds in India witnessed a net inflow of Rs 200 crore in January in gold exchange traded funds as compared to Rs 27 crore in the preceding month, making it the highest infusion in more than seven years in January.
The yellow metal is expected to trade with positive bias amid geopolitical worries.
"Gold may edge higher further on hints that the coronavirus outbreak in China has negatively impacted global businesses and the economy, said Hareesh V, Head of Commodity at Geojit Financial Services. Meanwhile, gains may be limited owing to a strong US dollar and moderate physical market activities, he added.
Commenting on technical outlook of spot gold, he further added, "As long as prices stay above $1,560 expect upticks to continue towards $1,592 initially followed by $1,610. Weakness is expected only on a close below $1,545."
By Rupa Burman Roy