The novel coronavirus has jolted investor sentiment globally and has impacted almost all asset classes. The bullion market has also witnessed huge volatility as investors weigh flight of capital to the US dollar with various monetary and fiscal stimulus packages being announced.

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The lockdown across different states in India has resulted in subdued trade in the gold market in the country.

According to recent trends, the yellow metal prices are moving in tandem with risky assets such as equity markets.

This is because investors have pulled money out of almost all asset classes, including gold, in order to park it in the US dollar.

But the stimulus measures announced by the US Federal Reserve to support the economy expected to give a fillip to the gold price.

The series of measures announced overnight by the Fed led recovery in equity markets globally and halted a 10-day rally in dollar.

In fact, the demand for gold this month is the heaviest since the global financial crisis in 2008, analysts said.

The emerging market currencies and commodity prices have benefited from the Fed's steadying hand, analysts said.

“Gold is moving in tandem with equity markets. The short term trend for the yellow metal remains positive. However, it will be important to see when the virus spread gets under control, which will boost investor confidence in the market,” said Amit Sajeja, AVP Research - Commodities & Currencies at Motilal Oswal.

The international gold prices extended their rally after the US Federal Reserve's unprecedented measures to help an economy reeling from the coronavirus pandemic halted a rush for cash.

Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, rose 1.8 percent to 923.99 tonnes on Monday.

According to Sajeja, the rally in international gold prices may extend towards $1,650 per ounce but not beyond that.

"Moreover, silver prices may rise to $14.7 per ounce in short term," Sajeja added.

On MCX, Sajeja expects gold prices to trade in the range of Rs 41,700 to Rs 42,000 per 10 grams.

In the long run, analysts believe the volatility in commodity prices to prevail.