India gold prices hit all-time high

2 July, 2020 12:00 AM printer

India gold prices hit all-time high

MUMBAI: Gold prices in India hit an all-time high on Wednesday, 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 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, report agencies.

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

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

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.