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Gold prices zoom, defy pandemic gloom

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Gold prices zoom, defy pandemic gloom

If there is one commodity that has overcome the Covid blues, it has to be gold. The yellow metal has not lost its lustre even as prices of assets are on a downward spiral. International prices of gold have remained buoyant through the peaking Corona crisis, hovering around $1800 an ounce.

In the domestic market too, gold seems to have broken the glass ceiling, scaling an all-time high. Gold prices touched an unprecedented Rs 50,000 per 10 gm (24 carats) Wednesday, emblematic of the robust demand among consumers.

Most people are leaning on gold amid this deepening global pandemic especially at a time when there is a slump in interest rates and plummeting NAV (Net Asset Value) of mutual funds. In India, gold has a free bull run as deferred weddings have unlocked a firm demand for the yellow metal.

The escalation of Covid-19 cases has gripped panic among the customers. Gold is an innocuous investment and possibly, the safest hedge against market volatility. While some of the customers are encashing on their about to lapse instalment scheme, others have displayed an unusual penchant for buying gold despite rocketing prices. Branded jewellers are seeing recovery rates of 65-70 per cent across stores compared to last year though prices have spiralled by around 40 per cent. People are on a gold buying spree as the perpetuation of Covid crisis is sinking the global economy into a deeper crisis. Gold sales and footfalls at stores have spiked since the government eased lockdown curbs. Investment demand for gold has also surged, goading investors to opt for the safe haven.

Analysts feel that gold prices have escalated amid mounting concerns of Covid pandemic. However, with new infections and death cases peaking, the virus fears will subside and the markets will price in this factor, triggering a correction in prices. Gold is expected to retreat lower from its crest valuations once the pernicious effects of the Coronavirus peter out and the world economy stabilises.

Article Written By Dbyajit Sahu

Image Source: Google

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