Commodity prices extended their decline on Tuesday amid volatility, after a sharp fall the previous day on concerns over global economic growth as the coronavirus (COVID-19) pandemic spread.
At Zaveri Bazaar here, silver fell four per cent to close at Rs 35,145 a kg on Tuesday. Traders were not keen on deals and were offering a high spread to buyers. Many offered April delivery at the low price.
The spot price of silver has fallen 24.7 per cent in 2020 so far. On the MCX, gold futures for delivery in April declined by nearly two per cent to Rs 38,743 per 10g in late afternoon trade. Silver futures for delivery in May dived 4.8 per cent to Rs 34,470 a kg. Gold and silver have lost 15 per cent and 25 per cent, respectively, since Covid-19 was first reported in China during January.
“Global sentiment continued to remain weak for both equities and commodities, due to widening spread of Covid-19 and its casualties. As a result, volatility with a downside bias in commodities would continue,” said Priyanka Jhaveri, assistant vice-president at Kotak Securities.
Both spot and futures prices declined in the afternoon session, which continued towards the end of the day.
“Traders liquidated their holdings in diversified asset classes like gold and silver to pay margins in stocks,” said Kishore Narne, associate director, Motilal Oswal Financial Services.
Compiled by BS Research Bureau Source: Exchange, Bloomberg
The volatility in gold and silver yielded a record turnover on Monday in bullion on the MCX, of Rs 35,112 crore across bullion.
All leading metals, barring nickel, declined 1-1.5 per cent on the LME.
In jewellery stores, customer footfall is down 60-70 per cent, due to official advice on not visiting crowded places.
Anuj Gupta, deputy vice-president at Angel Broking, says: “In the current scenario and high volatility, we are not recommending to buy gold, as it is entering a bear zone. We are expecting correction in gold towards $1,380 to $1,350 (an oz) in comexes and Rs 38,000 to Rs 36,500 per 10g in domestic markets. Silver is also expected to fall and might test $11-11.5 in comexes and Rs 32,000 to Rs 30,000 in domestic markets.”