Gold prices touch eight-year high in spot market

Kolkata: Price of gold touched an eight-year high in the spot market on Wednesday at Rs 50,600 per 10 gm in line with global trend as fears of a second wave of Covid-19 make investors stick to the ‘safe haven’ yellow metal.

On Multi Commodity Exchange of India, the precious metal hit a fresh all-time high of Rs 48,982 per 10 gm before closing at Rs 48,762. MCX silver continued to trade close to Rs 50,000 per kg.

Jewellers said the high price will further impact physical demand for gold, which is already down. “Physical demand is quite less compared to month on month last year,” said Ishu Datwani, founder of Anmol Jewellers chain. “Only people with genuine demand are coming.”

In thin trade, physical gold dealers were offering a discount of up to $22 per ounce over official domestic prices on Wednesday afternoon, up from the last week’s $18 per ounce, trade insiders said.

Meanwhile, global prices of the precious metal increased further after top US pandemics expert Anthony Fauci on Tuesday warned that the number of new Covid-19 could grow to 100,000 daily without proper social-distancing and other safety measures, triggering fears of a second wave of infections in the US and other countries.

“There are (also) worries over reigniting US-China trade war, giving a boost to safe-haven demand for gold,” said Rahul Gupta, head of research (currency) at Emkay Global Services.

Tapan Patel, senior analyst (commodities) at HDFC Securities, said spot gold prices at Comex are nearing the key resistance level of $1,800 per ounce. “A breakout may lead prices towards $1,920 per ounce in the medium term,” he said.

Jewellers expect gold prices to touch Rs 55,000 per 10 gm in six months to one year.

“I basically feel that the current trend for the gold is bullish and for the coming next two years it is likely to move upwards,” said Aditya Pethe, director of Waman Hari Pethe Jewellers, a Mumbai-bsaed jewellery chain. “No one can predict the exact price as currently the trend is on rise, but it might change after six months. In general, the market sentiment is that for the coming six months to one year the gold prices are likely to cross $2,000 per ounce, which comes to roughly Rs 55,000 per 10 gm,” he said.