Gold prices have shot up to touch their record high in future markets due to the coronavirus ravaging across the world. The demand for gold has been on the higher side of late. However, there is no trading of gold in physical form happening in India due to the ongoing 21-day lockdown.
June gold futures shot up nearly 1% to record its fresh high of Rs 45,800 per 10 gram on the Multi Commodity Exchange (MCX). May silver futures grew 0.4% to touch Rs 43,670 per 1000 gram. India mostly imports most of its gold requirements and gold prices include 3% GST and 12.5% import duty.
Gold is expected to see profits touching new levels in the coming days on the back of coronavirus. Also, gold is anticipated to find support at the Rs 45,000 levels and silver around the Rs 42,500 level. Gold rates have nearly remained flat in the global markets but have managed to float around their one-month high.
The impact of coronavirus on the global economy is looming large. This has directly resulted in gold prices recording their fresh highs. This has forced the US Federal Reserve to announce a slew of economic measures, which supported gold prices. Spot gold was trading at $1,686.82 an ounce.
Silver eloped 0.5% to touch $15.40 and platinum jumped 0.3% to trade at $745.74. The jump in the prices of precious metals is attributed to the economic stimulus provided by central banks around the world. Also, the demand for gold and other precious metals are high on the back of speculations of the world heading for a recession.
The US Federal Reserve came up with a 2.3 trillion dollar package last week. This was with the view of supporting the small businesses and local governments. The European Union finance ministers last Thursday concluded to support their economies with a package of 500 billion euros.
Investors in India are unable to buy physical gold as the country is under lockdown to prevent further spread of the coronavirus infection. This has capped the gains in gold prices to some extent.
For any clarifications/feedback on the topic, please contact the writer at vineeth.nc@cleartax.in
Engineer by qualification, financial writer by choice. I am always open to learning new things.
