In early trade on March 16, 2020, while the emergency rate cut by the US Federal Reserve pushed the yellow metal higher in price, nonetheless in the later part of the trade as investors dumped the commodity for covering losses in stocks amid global sell-off the metal pared gains heavily.
On the MCX, gold breached levels of Rs. 40,000 per 10 gm and declined as much as 2.06% or Rs. 830 in Monday's trade to Rs. 39,518 per 10 gm. It is worth mentioning that only recently scaled to all-time highs of Rs. 45,000 per 10gm. Silver in line also bore the brunt and melted in price by as much as 10.57% or Rs. 4280 to Rs. 36,207/kg.
Gold Prices In Global Markets
Mirroring trend in financial markets around the world, global gold prices on Monday tumbled to levels below $1500 per ounce, hitting the lowest level since December 2018. Spot gold price saw a decline of as much as 4% during the session and was last seen trading at $1492.5 per oz.
Gold Not Proving To Be A 'Safe Haven' Anymore
During the current meltdown in the global financial markets, decline in gold prices comes as a surprise which otherwise increases in price. Also, easing monetary policy from major global central banks fails to lend support to gold prices.
In this context, Allianz's chief economic advisor, Mohamed El-Erian, said to a leading business channel that "when people cannot sell what they want to sell, they sell what they can sell".
The bearish momentum in gold together with asset classes highlights market dislocation in the coming session.
Platinum- Worst Hit; Declines As Much as 26%
Even as the emergency US rate cut fails to curb market sell-off led by coronavirus scare, platinum in line with other commodities tumbled more than 25% to hit an over 17 year low. This came in as investors showed preference for cash and dumped their holdings in hard metals.