Gold Prices Hit Rs 71,000; Why The Sudden Spurt?

By
OB Bureau

New Delhi: Navratri and Gudi Padwa, the Hindu festivals considered auspicious for buying gold are here and the prices of the yellow metal in India have hit a record high of Rs 71,080. Silver too scaled a new peak of Rs 82,064 per kg. Gold is expected to see another price hike when the interest rates fall which investors believe could happen later this year, News18 reported.

The bullion rate has seen a 14% increase since March. Geopolitical tensions, wars and grim economic outlook and the timing of the rate cuts by the Federal Reserve have added to the sudden record highs in gold prices. Spot gold in the Chicago Mercantile Exchange rose to $2,344 per ounce, while US gold futures shot up to $2,361 despite expectations of the US Federal Reserve delaying the interest rate cuts after robust US job growth.

World Gold Council’s Regional CEO (India), Sachin Jain, said gold prices touched a historic high despite near stagnant demand due to a fall in jewellery demand in the March quarter in both rural and urban centres, The Hindu reported.

There is a spurt in consumer gold demand during festive seasons in India and the industry has reported good pre-bookings ahead of Gudi Padwa, Ugadi, Navratri and Ramzan in April. The demand for gold jewellery will be subdued in the June quarter due to restrictions on gold movement over the Lok Sabha election for the next two months, News 18 reported quoting experts.

The Reserve Bank of India (RBI) bought 8.7 tonnes of gold in January, the highest in two years. The central bank’s gold holdings had touched 812 tonnes as of January-end, as per the World Gold Council.

OB Bureau

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