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Tuesday, September 22, 2020

Rush to safe haven assets pushes gold to Rs 50,000

Standard gold on Wednesday rose to hit a record high of Rs 50,000 per 10 gram in Mumbai, reflecting firmness in the international market.

Written by George Mathew | Mumbai | July 23, 2020 3:04:33 am
Standard gold on Wednesday rose to hit a record high of Rs 50,000 per 10 gram in Mumbai, reflecting firmness in the international market. (File)

Gold has touched a nine-year high of Rs 50,000 per 10 gram as global uncertainties triggered by Covid pandemic, weak dollar, low interest rates and stimulus programmes have increased the appetite for the yellow metal, considered a safe haven for investors during a period of uncertainty.

Standard gold on Wednesday rose to hit a record high of Rs 50,000 per 10 gram in Mumbai, reflecting firmness in the international market. It has surged nearly 40 per cent in the last one year, while Sensex showed a loss of 0.41 per cent at 37,871.52 (Wednesday closing) in the same period.

“A weak US dollar, EU leaders approving a recovery plan worth 750 billion euros, expectation of US Fed keeping interest rates near record low level till the end of 2022 and issues related to the virus getting prolonged are the key reason for the rally in precious metals,” said Nish Bhatt, founder & CEO, Millwood Kane International.

Gold futures prices soared to a nine-year high of $ 1,856.60 at London’s trading session on Wednesday, rising to a level not touched since September 2011. Gold is traditionally used as a hedge against inflation and global economies are considering further stimulus to boost growth which may fuel inflation further.

Many gold analysts have now revised their price targets saying that prices could go up to Rs 65,000 per 10 grams in the next 18-24 months.

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