Gold prices hits the highest in India; dampens retail demand
Business: The gold prices touched the highest peak on Wednesday. The active gold contract on MCX NSE 0.32 % hit a record high of Rs 50,020 per 10 gm in the morning trade. In early trade, the price of the precious metal was 49,996 rupees ($670.32) per 10 grams and now the increased rates are taking their gains to 28% in 2020 after rising a quarter in 2019.
The rise in price of this metal has dampened the retail demand in India as India is the second-largest consumer of gold.
In the overseas market, spot gold jumped more than 1% on Wednesday to its highest in absolute one decade, driven by a weaker dollar and safe-haven buying.
‘There is a certain de-merit of the price rise as the retail demand is damping, although lately investment demand is improving’, said a Mumbai-based bank dealer with a bullion importing bank.
” The share of investment demand is very small compared to retail purchases.” , he added.
India’s gold imports in the June section dropped 96% from a year earlier to 13 tonnes after shipments virtually ground to a pause in April and May.
Meanwhile, local silver prices jumped nearly 6% on Wednesday to 60,782 rupees per kg, the highest in 7-1/2 years.
The pandemic condition is bringing many economic crisis in the market as the days are increasing and metal business is one of them.