Gold Recovers, Climbs Above Rs 40,000 As Major Central Banks Announce Measures

Gold prices in India gained on Wednesday on positive global cues after having lost at least Rs 5,500 in value in 6 preceding trading days. On MCX, gold futures were trading 0.08 percent higher at Rs 40,278 per 10 grams. Silver futures also made a recovery with over 1.34 percent gains to Rs 35,928 per kg.

In the international markets, spot gold rose 0.7 percent to $1,538.63 an ounce as the US Federal Reserve announced measures to boost liquidity in the market easing concerns of a potential cash crunch from disruption in the global economy due to coronavirus.

On Tuesday, Fed said that it would reinstate a funding facility used during the 2008 financial crisis to get credit directly to businesses and households in the US. The Trump administration pursued a $1 trillion stimulus package that could provide $1,000 payments to Americans within two weeks to calm the economy hit by the virus.

In Britain, a new lending scheme was launched to provide short-term bridging finance for large businesses hurt by the spread of coronavirus. It will be run and funded by the Bank of England.

A Reuters report said that the Japanese Prime Minister will be forming a panel of key economic ministers and Bank of Japan Governor to discuss measures to revive its economy.

In China, consumers have started gingerly venturing into malls and restaurants, encouraged by the sharp drop in new virus infection cases in the country.