MUMBAI: 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.

On Multi Commodity Exchange (MCX), August gold futures rose 1% to a new high of Rs 50,010 per 10 gram. This is the first time gold prices in India have touched Rs 50,000 in the futures market. September silver futures on MCX jumped 6.6% to Rs 61,130 per kg.

However, the price rise dampened retail demand for gold in India, the world’s second largest consumer of the precious metal.

In overseas market, spot gold jumped more than 1% 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% from a year earlier to 13 tonnes after shipments virtually ground to a halt in April and May.