5 Bases of Corona Gold Companionship, hike by Rs. 50,000/-

  • Gold rises by nearly one thousand rupees crossed 46 thousand with all-time hike
  • As the recession of 2008, there is a spectacular rise in the price of gold
  • Five reasons, from the reduction in interest rates to the closed supply, are supporting the price of gold

At the speed of which Coronavirus is spreading in the whole world, on that speed, the rate of gold is increasing rapidly. It looks like Corona and Sona (gold) are getting close. Due to which gold has started scaring people. In fact, because of Corona, five such bases have been formed in the worldwide markets, due to which gold has now begun to scare the investors all over the world. If we talk of today, gold has come up to $1741 an ounce in the International market, which is the highest level till now. At the same time, gold has crossed 46 thousand in the Indian futures market. These five reasons only can bring the price of gold to 50 thousand rupees per ten grams. Let us also tell you what those five reasons are, due to which gold has become a friend of the Coronavirus.

Gold prices at record levels

Today, gold prices in international markets and domestic markets are trading at record prices. Firstly, if we talk about the foreign markets, then the price of gold on Comex is trading around $1750 per ounce. At the same time, talking about the Indian futures market, it is trading at a record level of Rs. 46260 per ten grams with an increase of nearly one thousand. In the coming days, the price of gold can reach 50 thousand rupees per ten grams.

Deduction in Interest Rates

Central banks around the world have cut interest rates as economic activity stalled due to Coronavirus. From Fed to RBI, there is a 100-basis point deduction. Whenever central banks take such steps, there is a rise in the price of gold. A similar thing happened during the 2008 recession as well.

Announcement of Incentive Package

Whenever such adversities occur in the world, governments across the globe give incentives to increase liquidity in the country’s economy and to drive wheels of the economy. Currently, in this phase of the crisis, all countries have announced stimulus packages. Japan has gone even further; it has announced a stimulus package of 20 percent of its total GDP. In the coming days, the rest of the world can also be seen following it. Whenever such an incentive package is announced, there is a spurt in the price of gold.

Fall in the Equity market

At the same time, the equity market is witnessing a great decline. Along with US and Asian markets, Indian stock markets have fallen more than 20 percent. Due to that, investors have suffered a lot, and investors have turned to gold. This is the reason why there is a continuous rise in the price of gold.

Declaration of Economic Recession

Economic agencies around the world have accepted the global slowdown. A few days ago, the IMF also clearly stated that the world economy has started looking like the Great Depression. Therefore, gold has now become a more secure investment. According to experts, during the recession of 2008, there was a rise in the price of gold.

Supply Completely Closed

At the same time, the supply is completely closed due to the lockdown by the Coronavirus. On the other hand, demand has also fallen due to the closure of the spot market. Looking at India as an example, every year, 800 tonnes of gold is imported in India; this time drop of 50% could be seen. Due to which gold is blistering/exploding.

What do Experts Say?

According to Kedia Advisory’s Director Ajay Kedia, at present, there are five bases of bonding with Coronavirus with gold. An economic slowdown, the stimulus package, fall in the stock market, fall in interest rates, and supply blockage. Due to this, the price of gold is seen to be increasing rapidly. Experts say that in the coming days, this same speed can also reach gold prices beyond Rupees 50 thousand per ten grams. Simultaneously, the cost of gold in the international market is expected to reach around $2000 per ounce.