A sharp global rally in gold on Wednesday pushed the spot price in Mumbai’s Zaveri Bazar to a new all-time high of Rs 48,925 per 10 gram (standard gold), up 1.4 per cent. With the addition of 3 per cent GST, the price of the yellow metal exceeded Rs 50,000 per 10 gram.
Silver, too, breached the Rs 50,000 mark for the first time and closed at Rs 50,140 a kg, a 2.6 percent jump from Tuesday.
Gold futures in the US had crossed the $1,800-an ounce mark earlier, but for the first time in 8 years, even the spot price was above $1,800. The international bullion was trading higher for the fourth straight session on expectations of more stimuli from the Federal Reserve to combat the effect for the second wave of Covid-19 cases. Cases in the US have crossed the 3-million mark.
Australia has already re-imposed lockdown in Melbourne and any such developments in the US could further jeopardize growth, leading investors towards safe-haven gold.
Anuj Gupta, deputy vice-president, Angel Broking, said: “Today, the gold price has again reached a new lifetime high, of Rs 49,045 for the MCX’s August contract. In the international market, gold has touched a multi-year high $1,804 an ounce.
Safe heaven demand is rising due to an increase in Covid-19 cases in the world. The economic slowdown and lowering of global growth forecast by IMF are also supportive of bullion. We expect gold to touch the $1,840-$1,880 level very soon. On the MCX, it may test Rs 51000 to Rs 52000 levels.”
The gold ETF investment data released on Tuesday evening by the World Gol Council show gold-backed ETFs recorded their seventh consecutive month of positive flows, adding 104 tonnes in June. This brings global net inflows in the first half of CY20 to 734 tonnes ($39.5 billion), significantly above the biggest annual inflows, both in tonnage terms (646 tonnes in 2009) and value ($23 billion in 2016).
Prithviraj Kothari, national president, Indian Bullion Jewellers Association, said: “My four decades of experience about the Indian market has made me conclude that the consumer response towards gold in the country is demand-driven.”