The price rise to record highs mirrors the jump, though not to all time highs, in the metal in overseas markets like New York, where it traded at $1859 an ounce at the time of writing. The all time high was $1911 an ounce in April 2011.
The demand for jewellery remains tepid, but investment demand, whether through sovereign gold bonds or ETFs have risen during the Covid-induced lockdown. In the fourth tranche of issuance by RBI this month, residents subscribed to over 4 tonnes of gold , a record in any tranche.
Global experts like Sunil Kashyap, head , commodities, Asia, at Scotiabank, attributed the rise in gold, as that of other asset classes, to the huge monetary stimulus infused by the US Fed and other central banks to tackle the Covid-induced global economic slowdown.
He said during a webinar hosted by the PHD Chamber of Commerce and Industry today that the trend in precious metals like gold would be sustained by the stimulus measures of the Fed, which would continue for the next few years, and that of the ECB.
Jeremy East, CEO, East Wind Capital, said Covid had upset the correlation between various global bullion platforms with markets like Shanghai trading at a discount to London and Comex trading at a premium to London amid selling by people in the East and buying by people in the West.
