Gold prices surged by Rs 940 to hit a new lifetime high of Rs 62,020 per 10 grams in the national capital on Thursday, according to HDFC Securities. The rise in gold prices came on the back of strong global trends, with investors flocking to the precious metal as a safe-haven asset amid economic uncertainty and market volatility. In the previous trade, gold had settled at Rs 61,080 per 10 grams.
Meanwhile, silver prices also soared by Rs 660 to reach Rs 76,700 per kg. The rally in silver prices was largely driven by strong demand from industrial units and coin makers.
The surge in gold and silver prices in Delhi mirrored a similar trend in the international market, where gold prices hit a four-month high amid growing concerns over the global economic recovery. Investors are increasingly turning to gold as a hedge against inflation and currency devaluation, as central banks around the world continue to maintain low interest rates and pump trillions of dollars into their respective economies.
Analysts believe that gold prices could continue to rise in the coming months, with some predicting that the precious metal could hit $2,000 an ounce by the end of the year. This would mark a significant increase from current levels, where gold is trading at around $1,780 an ounce.
In addition to the economic uncertainty, geopolitical tensions and a weaker US dollar are also contributing to the rise in gold prices. The US dollar index, which measures the value of the greenback against a basket of other major currencies, has fallen by around 9% since its peak in March 2020. A weaker dollar makes gold cheaper for investors who hold other currencies, which in turn drives up demand for the precious metal.
The rise in gold prices is also having an impact on the wider economy, with gold imports into India, one of the world’s largest consumers of the precious metal, falling sharply in recent months. According to the World Gold Council, India’s gold imports fell by 47% in March compared to the same period last year, as high prices and pandemic-related restrictions hit demand.
Despite the decline in imports, India’s gold demand is expected to pick up in the coming months, particularly as the country heads into its festive season. India’s peak gold-buying season typically runs from August to October, with demand expected to be particularly strong this year as consumers look to make up for lost time after last year’s subdued celebrations due to the pandemic.
