Gold Prices Ease On Stock Market Revival

On Thursday, gold futures on MCX were trading lower by 0.24 percent at Rs 43,465 per 10 grams as fund allocations by major countries and global organisations towards fighting coronavirus effects helped increase the risk appetite of investors. Stock markets in Asia were trading higher after Dow Jones Industrial Average soared more than 1,000 points overnight stateside.

On Wednesday, the International Monetary Fund (IMF) announced a package of $50 billion to combat the impact of the global epidemic. Earlier this week, the World Bank announced $12 billion in emergency aid to help countries affected by the spread of the virus.

However, the decline was marginal as worries of the fast-spreading coronavirus continued to maintain the safe-haven appeal of the metal. In the international market, gold edged up on Thursday with Spot Gold trading at $1,639.44 an ounce. Support is seen for the bullion, as well as the US dollar in the global market, an indication of safe-haven buying, according to analysts.

At present, the situation is volatile for equities as well as gold. Significant overnight gains on Wall Street were also a result of the strong performance of former American Vice President Joe Biden in the Democratic nomination campaign.

The US elections, interest rates cuts by central bank across the globe and concerns over the economic impact of COVID-19 will dedicate the movement of funds of investors between equities and safe assets. If the stock markets continue to gain for a week, it could indicate subsiding fears of global recession and put pressure on gold prices.

While countries prepare themselves to tackle the effects of the viral epidemic, there is little understanding on how long it would take to contain the virus and how far it could spread before it is contained.