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Discounts on gold in India go up as prices hit record high

28 June 2020

 

Physical gold discounts in India widened this week as prices hit a record high and a surge in coronavirus cases restricted buying despite reopening of stores. Indian dealers were offering a discount of up to $18 an ounce over official domestic prices this week, as compared to last week's $13, Reuters reported. Domestic gold prices include a 12.5% import tax and 3% GST.MCX gold futures in India hit a record high of ₹48,589 per 10 grams on Wednesday and closed the week at ₹48,315. Silver rates in India ended the week at ₹48,390 per kg.

 

Among commodities, gold has been the stand-out winner this year, rallying about 16% in global markets. The coronavirus health crisis and US-China tensions have boosted the safe-haven appeal of gold. In addition, unprecedented stimulus by central banks and governments has also lifted prices of non-yielding gold, which is considered a hedge against currency debasement and.Indicative of the robust investment demand for gold, holdings in bullion-backed exchange-traded funds or gold ETFs have swelled to a record this year, with net inflows of more than 600 tons, according to Bloomberg's estimates.While investment demand remains robust, physical consumption has been dented in major gold hubs across the world. Goldman Sachs Group Inc. sees gold prices touching $2,000 over 12 months. US gold futures settled 0.5% up at $1,780 on Friday.The safe-haven buying into the ETFs has continued to go up, says Jigar Trivedi, research analyst at Anand Rathi Shares, supporting the price of gold.Globally, total coronavirus cases approached the 10 million mark while the death toll neared half a million.

 

 

Source: https://www.livemint.com/mar