Gold price falls by Rs2,200 per tola in local market

Gold price sets a new record of Rs 78,800

Gold price falls by Rs2,200 per tola in local market

Analysts stated the gold price may just breach the $1,700 barrier quickly.

"The commodity's rise past-$1,700 can take aim at highs marked during November and October 2012, respectively near $1,751 and $1,794".

The price of gold has surged to its very best degree in seven years as worries in regards to the coronavirus led buyers to hunt a protected position for his or her cash.

"The markets are spooked right now", said Bob Haberkorn, senior market strategist at RJO Futures, citing coronavirus fears. Along with this, the coronavirus is spreading outside China in South Korea, Italy and Central Asia as well.

It has unfold to some 28 different global locations and territories, with a demise toll of round two dozen, based on a 1 tally.

The World Health Organization said it was anxious about the growing number of cases without any clear link to China. This is owing to the investor flight towards gold as a safe haven amongst dampened economic sentiments.

The curve inversion between the 3-month and 10-year U.S. Treasury bond yields deepened, in what economists view as a recession signal.

Among other safe havens, the United States dollar edged higher as the rapid spread of the new flu-like virus drove fears of a pandemic, while the benchmark USA 10-year Treasury yield hovered close to its lowest since early September.

"The data was a wake-up call for the USA equity market, hitherto complacent about the impact of the virus", NAB currency strategist Rodrigo Catril said, adding it "was probably too early to throw the towel" on the greenback.

MSCI's gauge of stocks across the globe shed 2.97%, its biggest single-day decline since June 24, 2016.

The price of gold has been rising steadily in the domestic market since July, 2019, with occasional drops.

This is the fourth time this year that domestic gold prices have broken previous records on the back of soaring global prices.

Apart from speculative positioning, financial uncertainty and low interest rates are also bolstering demand for gold, Phillip Futures analysts said in a note.

Lower interest rates reduce the opportunity cost of holding non-yielding bullion.

The gold/silver ratio, which is the amount of silver required to buy one ounce of gold, now stands at 89.09 to 1.

Among other precious metals, silver eased about 0.3% to $18.58 per ounce.

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