AGENCIES, New Delhi/Mumbai: Gold prices in India hit a record high in futures markets on Monday even though physical buying remained suspended in domestic markets due to the 21-day Covid-19 lockdown.
Prices of gold in India include 12.5% import duty and 3% Goods and Services Tax (GST). India imports most of its gold requirement.
In the global market, the yellow metal fell as investors booked profits after prices hit a one-month high last week, while worries over a coronavirus-driven steeper global economic downturn and the US Federal Reserve’s stimulus measures limited bullion’s losses.
The US Federal Reserve had on Thursday announced a broad, $2.3 trillion stimulus package in a bid to keep the economy afloat amid the outbreak, which had forced 16.8 million Americans to file for unemployment benefits since the week ended March 21.
“The Fed stimulus is a magnet for gold. Not only does it improve the opportunity cost for holding gold but at some stage it will eventually water down the dollar,” Stephen Innes, chief market strategist at financial services firm AxiCorp, said while speaking to Reuters.
European Union finance ministers also agreed on half-a-trillion euros worth of economic support but left open the question of how to finance recovery in the bloc headed for a steep recession.
Meanwhile, major physical bullion hubs saw activity dwindle last week due to coronavirus-led restrictions, with strained supply chains cut off from soaring safe-haven demand in some regions.