Gold prices in India hit a record high on Wednesday, tracking a global rally, as expectations of more stimulus to resuscitate pandemic-hit economies lifted the metal's appeal as an inflation-hedge. Domestic gold futures reached an all-time high above the Rs 50,000 mark in early trade, taking their gains to 28 per cent in 2020 after rising a quarter in 2019. However, the price rise dampened retail demand for gold in the country, which is the world's second largest consumer of the precious metal.
In overseas market, spot gold jumped more than 1 per cent on Wednesday to its highest in nearly nine years, driven by a weaker dollar and safe-haven buying.
The price rise has been dampening retail demand, although lately investment demand is improving, said a Mumbai-based bank dealer with a bullion importing bank.
"But share of investment demand is very small compared to retail purchases."
India's gold imports in the June quarter plunged 96 per cent from a year earlier to 13 tonnes after shipments virtually ground to a halt in April and May.
Domestic silver prices jumped nearly 6 per cent on Wednesday to Rs 60,782 per kg, the highest in seven-and-a-half years.
($1 = Rs 74.5850)