After seeing a sharp fall of 5.5% last week, domestic gold prices recovered slightly on Monday. On the Multi Commodity Exchange (MCX), gold contracts were trading higher by Rs 280, or 0.7%, to Rs 41,677 per 10 gm at 9:20 am. Silver futures also rose by Rs 799, or 1.8%, to Rs 44,778 per kg in the morning.
International gold prices also advanced over 1% on Monday as concerns regarding the coronavirus epidemic deepened, turning the investors towards safer havens. Spot gold gained 1.2% to $1,602.90 per ounce by 0104 GMT, while US gold futures rose 1.9% to $1,597.10.
Analysts believe that gold prices are likely to remain volatile as they are prone to profit-taking at higher levels. But the overall trend seems bullish in the near term, with domestic prices likely to retest Rs 42,000 levels. “Gold will remain positive due to increased safe-haven demand amid economic fears due to the virus outbreak in China, feeble global equities and a weak US dollar. Meanwhile, higher-level profit booking and concerns over physical demand from top consumer China and India are likely to weigh down the sentiment,” Hareesh V, head of the commodity at Geojit Financial Services, told Moneycontrol.
Manoj Jain, director at IndiaNivesh Commodities, said: “We expect precious metals to remain volatile this week and one dead cat bounce is expected. Gold is expected to trade in the range of Rs 40,800-42,000. Silver is expected to be traded in the range of Rs 43,700-45,500.” Jateen Trivedi, senior research analyst (commodity and currency), LKP Securities, said some profit-booking in domestic gold prices can be expected at higher levels on Monday. For the day, Rs 42,200-42,600 will act as resistance, whereas Rs 42,000-41,750 will be supports.