Gold prices in India surged to a record high in India on Friday, tracking strong gains in global markets. On MCX, gold futures surged as much as 1.6% to fresh high of ₹47,462 per 10 gram, overtaking previous high of ₹47,327, hit last month. Silver prices also surged ₹2586 or about 6% to ₹46,721 per kg. Gold prices in India includes 12.5% import duty and 3% GST.
Gold prices have surged about 50% in past one year in India amid rupee's depreciation against US dollar, US-China tensions and worries about deeper global recession amid the coronavirus crisis.
Indicating robust investor interest in gold, holdings with SPDR ETF, the world's biggest gold exchange traded fund rose to 1104.71 tonnes, highest since April 2013.
On Friday, gold prices crossed the $1,750 mark per ounce in global markets, posting around 2% gain for the week.
Expectations of further stimulus from US Federal Reserve has risen after chairman Jerome Powell earlier this week warned of an "extended period" of weak economic growth, vowed to use the central bank's power as needed.
Gold prices have been underpinned by talks of further US stimulus and worsening US-China relations while the investment demand for gold is also rising on the back of recessionary pressures and trade war, said Jigar Trivedi, research analyst at Anand Rathi Shares.
The coronavirus, which has infected over 4.46 million people across the world, has hammered global economic activity, prompting central banks and governments to unleash massive stimulus measures. Gold tends to benefit from economic stimulus because it is widely viewed as a hedge against inflation and currency debasement. Though many countries have started to ease restricitons, the move has rekindled concerns of a second wave of infection.
"The outlook is positive for next week. FOMC meeting minutes, US existing home sales and building permits data will be critical to monitor. Trade conflicts have resurfaced and pressure on Fed is building to bring rates below zero. On the other side Donald Trump has spoken for strong dollar," he added, saying that the undertone for gold remains positive and suggested a buy-on-dips strategy. (With Agency Inputs)