Gold prices hit new high as Covid scare resurfaces

Our Bureau Mumbai | Updated on July 01, 2020

Gold prices touched a new high of ₹48,886 per 10 gram against the previous close of ₹48,559 on the back of a sharp rally in the international markets on fears that a second wave of Covid could take a huge toll on the global economy.

Similarly, gold (0.916 purity) was up by ₹300 at ₹44,780 per 10 gram.

The sharp rally in the yellow metal in the last few days has already wiped out the demand for jewellery in India and it is expected to take a further hit as the government extends the curbs. .

Some of the jewellers who had opened their shops a few days ago are preparing to shut them again due to weak demand and restriction on public movement proposed by the government. Loss of jobs across sectors and postponement of weddings have already taken a huge toll on gold demand.

Rahul Gupta, Head of Research, Emkay Global Financial Services, said the market sentiment turned cautious after news of fast spreading of the coronavirus around the globe and concern that a second wave of infections could hit soon. Also, there are worries over renewed US-China trade war, boosting the safe-haven demand for gold.

Gold futures at the MCX hit a fresh all-time high of ₹48,982 per 10 gram, while MCX silver continued to trade close to the all-time high of ₹50,000 per kg.

Ishu Datwani, Founder, ANMOL, said physical demand has been falling consistently as only people with genuine demand are visiting shops to buy jewellery. Once people start accepting the new rates psychologically, they will come back to buy, he said.

Aditya Pethe, Director, WHP Jewellers, said gold prices will continue to rise for the next two years and may touch ₹55,000 per 10 grams in six months before taking a pause.

Vaibhav Saraf, Director, Aisshpra Gems and Jewels, said given the current state of economic uncertainty and fast spreading of Covid, the safe haven status of gold would take the prices to ₹68,000 in two years.

In global markets, gold prices edged closer to an eight-year high. Spot gold edged up 0.1 per cent at $1,782.21 per ounce on Comex in the US, after hitting its $1,785 in the previous session — the highest since October 2012.

Published on July 01, 2020

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