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 "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 and #Silver Opening #Rates for 22/07/2020#IBJApic.twitter.com/O10c7s6VD3
— IBJA (@IBJA1919) July 22, 2020
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 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 Analysts Say
"After days of consolidation near the $1800/oz level, gold broke past the $1830/oz level resulting in extended gains," said Ravindra Rao, VP-head commodity research at Kotak Securities.
"Gold may continue to trade with a positive bias amid general weakness in US dollar and continuing stimulus measures to boost economic recovery," he added.
