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Gold prices hit record high as COVID-19 spike lifts safe-haven demand

Local gold futures hit an all-time high of 48,871 rupees ($646.66) per 10 grams in early trade, taking their gains to 25 percent in 2020 so far. The contract had gained nearly 25 percent in 2019.

July 03, 2020 / 04:25 PM IST

Gold prices in India hit a record high on July 1, tracking a global rally, as surging coronavirus cases in many countries raised the metal's safe-haven appeal.

Local gold futures hit an all-time high of Rs 48,871 ($646.66) per 10 gram in early trade, taking their gains to 25 percent in 2020 so far. The contract had gained nearly 25 percent in 2019.

However, this dampened the retail demand for gold in India, the world's second largest consumer of the precious metal.

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"Retail demand is negligible. Buyers are postponing purchases anticipating a correction in prices," said a Mumbai-based bank dealer with a bullion importing bank.

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In thin trade, dealers were offering a discount of up to $22 an ounce over official domestic prices on Wednesday afternoon, up from the last week's $18. The domestic price includes a 12.5 percent import tax and 3 percent sales tax.

The country's gold imports in May plunged 99 percent from a year earlier as international air travel was banned and jewellery shops were closed amid a nationwide lockdown to curb the spread of coronavirus.

In overseas market, spot gold firmed near an eight-year peak on Wednesday, as a spike in coronavirus cases in the United and States and many other countries has cast a shadow on hopes for a quicker global economic recovery, driving inflows into safe-haven assets.

According to a latest Reuters tally, the coronavirus has infected more than 10.48 million people worldwide so far.

Follow our full coverage of the coronavirus pandemic here.

first published: Jul 1, 2020 02:50 pm