NEW DELHI: The coronavirus outbreak has not led to a loss of sheen for the gold industry, with online gold buying seeing manifold increase a week ahead of the auspicious Akshaya Tritiya Day on April 26.
“As on April 22, Augmont has seen a spike of 8 per cent in gold buying. Akshaya Tritiya has great importance in our culture and we are sure there will be brisk gold buying digitally in the days to come,” said Sachin Kothari, director at Augmont, an online firm trading in bullion.
According to Religare Broking, gold has all the more relevance now as it continues to give impressive returns of more than 47 per cent since Akshaya Tritiya last year. On Multi Commodity Exchange of India (MCX) on Friday, gold’s June futures ended Rs 163 up at Rs 46,590 per 10 gram, extending their three-day gains to about Rs 1,300 per 10 gram. Silver futures on MCX settled 1 per cent higher at Rs 42,249 per kilogram.Analysts claim that given the global economic crisis due to the coronavirus epidemic, gold will only be a more favoured instrument among investors.
“Global economic turmoil due to the coronavirus crisis, heightened volatility in risk assets, strong ETF inflows, rupee depreciation towards record lows, and massive monetary and fiscal stimulus measures by the global central banks (especially the US Federal Reserve) and governments, will keep gold in demand from a long-term perspective,” observed Sugandha Sachdeva, VP (metals, energy and currency research), Religare Broking Ltd.
Analysts also said that gold prices have a strong floor emerging at $1,450 per ounce mark in global and Rs 39,500 per 10 gram mark in domestic markets, and look to chart their course towards Rs 52,000 per 10 gram mark from a medium-to-long-term perspective.
“One should bear in mind that gold does not produce interest or dividend, and gold prices fluctuate on the basis of the demand and supply pressure globally. However, it acts as an effective hedge during the crisis,” said Prashant Joshi, co-founder and partner, Fintrust Advisors.