Gold futures plunged to Rs 41,838 per 10 gram in the evening trade due to unwinding of long positions after a hike in margin calls forced traders to cut their positions. This caused prices to fall.
Investors liquidated the bullion holding in favour of cash to cover margin calls as the rising coronavirus cases hit equity markets hard. Indian benchmark Sensex and Nifty ended with a cut of 8 percent each and US market also crashed with the Dow shedding nearly 2,200 points.
The United States suspended travel from 26 European countries, excluding the UK in an effort to stop the spread of COVID-19 after the World Health Organisation (WHO) declared the virus a pandemic on March 12.
The US dollar index, measured against a basket of six currencies gained for the third straight day to 98 on March 12.
In the futures market, gold rate touched an intraday high of Rs 43,637 and an intraday low of Rs 41,800 on MCX. For the April series, the yellow metal touched a low of Rs 37,530 and a high of Rs 44,961.
Gold futures for delivery in April slide Rs 1,535, or 3.54 percent on the MCX trading at Rs 41,820 per 10 gram at 21:20 hours in a business turnover of 9,954 lots. Gold contracts for June delivery slipped Rs 1,500, or 3.42 percent, at Rs 42,380 per 10 gram in a business turnover of 13,943 lots.
The value of the April contract traded so far is Rs 9,780.90 crore and June contract saw the value of Rs 1,733.44 crore.
Similarly, Gold Mini contract for April was down Rs 1,496, or 3.45 percent at Rs 41,838 in a business turnover of 8,481 lots.
At 15:33 pm (GMT), spot gold slipped $71.62 at $1,563.82 an ounce in London trading.
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