This Article is From Jul 22, 2020

Gold Hits All-Time High, Futures Climb Above Rs 50,000 For First Time

Gold, Silver Rates Today: Gold and silver futures trading on the MCX soared to all-time highs, with the yellow metal contract climbing above the Rs 50,000 mark for the first time ever.

Sky-high prices have already dampened retail demand for gold in India

Gold Rate In India: Domestic gold and silver futures soared to all-time highs on Wednesday tracking a global rally, with the yellow metal contract climbing above the Rs 50,000 mark for the first time ever. Multi Commodity Exchange (MCX) gold futures - due for delivery on August 5 - rose by Rs 493 or 1 per cent to a record Rs 50,020 in morning. Silver futures due for a September 4 delivery climbed to a record Rs 60,782, surging 6 per cent from their previous close of Rs 57,342. Sky-high prices have already dampened retail demand for gold in India, the world's second largest consumer of the precious metal. (Also Read: Gold's "Dream Run" May Continue, Say Analysts)

At 11:03 am, the MCX gold futures traded 0.99 per cent higher at Rs 50,017, while the silver contract quoted at Rs 60,619, up 5.71 per cent from its previous close. (Track Gold Rate Here)

Precious metal prices have broken a series of records over the past few weeks amid rising COVID-19 cases in the country and the world. Typically, any sign of uncertainty in the capital markets boosts the appeal of gold as a safe-haven bet, as investors rush away from riskier asset classes.

In the international market, gold jumped more than 1 per cent on Wednesday to its highest in nearly nine years, driven by a weaker dollar and as expectations of more stimulus to revive pandemic-hit economies lifted the metal's appeal as an inflation-hedge. Spot gold was last seen trading up 0.8 per cent at $1,856.13 per ounce, having earlier hit $1,865.35, its highest level recorded since September 2011.

According to the India Bullion and Jewellers Association (IBJA), a Mumbai-based industry body, the opening rate of gold jewellery stood at Rs 50,220 per 10 grams and silver at Rs 60,043 per kilogram on Wednesday - both excluding Goods and Services Tax.

Gold jewellery prices vary in different parts of the country due to factors such as state taxes and making charges. India's gold imports dropped 96 per cent to 13 tonnes in the June quarter after shipments virtually ground to a halt in April and May.

Meanwhile, domestic stock markets snapped a rally that lasted five trading sessions in a row, with investor focus shifting back to rising COVID-19 cases in the country as optimism around earnings waned after a handful of subdued numbers.

The Sensex index fell as much as 0.58 per cent to 37,709.74 during the session, and the broader Nifty 50 benchmark slid to as low as 11,102.35, as the markets gave up early gains after a positive start.

In March, commodity exchanges cut down trading hours, in a shift from the practice of allowing trading till midnight, in the wake of coronavirus pandemic. The trading now begins at 9 am and ends at 5 pm, instead of 11:50 pm earlier.

What Experts Say 

Ravindra Rao, VP-head commodity research, Kotak Securities:

"Gold has rallied to record high levels reflecting firmness in the international market, where prices have been on a rise for the last few months but picked up pace amid sharp losses in the dollar, additional stimulus measures and robust investor inflows. Rising virus cases and US-China tensions have also underpinned the gold price.”

“Silver has rallied reflecting firmness in the international market. International silver prices have surged to 2013 highs on back of concurrent gains in gold and industrial metals and strong investor buying as is evident from ETF (exchange traded fund) inflows.”

Rahul Agarwal, director, Wealth Discovery:

"A number of factors including expectations of more stimulus measures especially in the European Union and the United States, weakening of the dollar and the continued rise in COVID-19 cases globally have contributed to the safe-haven demand for gold."

"Relentless money printing by global central banks, the uncertainty around COVID-19, rising US-China tensions and an overall atmosphere of geopolitical instability will be all contributors to the upward trajectory in gold prices in the coming days."