The resumption of economic and business activities has resulted in the contraction of the gold prices over August 2020. The demand for the yellow metal somewhat reduced over the last month. Eventually, it resulted in the felling of the gold price after a stupendous round of rallying since the onset of the COVID-19 pandemic.
The price per ten grams of 22 carats gold opened August Rs 52,550. It closed the month 3.81% lower at Rs 50,500. It recorded its peak of the month on the 7th of August when it touched Rs 54,500 while it was the most subdued on the 25th of August at Rs 50,350. Its range for the month was a massive Rs 4,150.
The price per ten grams of 24 carats gold began the month at Rs 53,500, and it shot up to as high as Rs 55,500 on the 7th of August. However, it ran out of steam and went on the declining trend. It recorded its monthly lowest on the 25th when it was reeling at Rs 51,350 before it eventually closed the month at Rs 51,500, losing 3.74% over August.
Also Read: Gold Price Trend Analysis: July 2020
The economic scenario now is much better than what it was in May and June as the businesses have been permitted to open up due to the ‘unlocking’. This has caused the rallying in the stock markets, which has eventually made the gold price to go down. After all, gold and stock markets are inversely related.
However, the stock markets are far from going back to the levels they were playing at in the pre-covid times. Sensex touched 40,000 mark last week before it fell to under 39,000 points while Nifty breached 11,800 levels and collapsed to less than 11,600 levels. With the GDP numbers for the Q1 out, it is interesting to see how gold and stock markets perform in this month.
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Engineer by qualification, financial writer by choice. I am always open to learning new things.