Gold is seen as a “safe haven” asset around the world, drawing investors during times of uncertainty.
International gold prices have been rising over trade and geopolitical tensions, with its spot price breaking US$3,000 per ounce in March and surging to US$3,500 less than two months later.
Rates in India have been hitting new highs as the rupee has also depreciated against the United States dollar. This has made imported gold even more expensive in India.
Analysts say the coming weeks will be crucial.
“People would definitely buy gold in the festive season. The demand would be there – but in which form the people would buy? Would that be ETFs, bars and coins? Or would that be the jewellery demand?” noted Naveen Mathur, director of commodities and currencies at Anand Rathi Share and Stock Brokers.
“I would not be too gung-ho that people would go with bags full of money to buy gold this festival season, because of the prices,” he added.
