29 November, 2020

During COVID Times, Why Gold Will Revive Household Fortunes And Small Enterprises

Gold is looked upon as a critical barometer during uncertain times in the economy. It is also a good investment vehicle in the current scenario

During COVID Times, Why Gold Will Revive Household Fortunes And Small Enterprises
outlookindia.com
2020-05-09T18:51:27+05:30

In the Hindu calendar, Akshay Tritiya is considered an auspicious day for people to buy gold. But this year the COVID-19 lockdown has dampened the demand for the precious metal. But given its resilience as a safe-haven asset, experts are forecasting that prices may cross Rs 5,000 a gram by the end of 2020.

Like crude oil, in case of gold too, India is a net importer and the currency movement plays a significant role in the determination of local prices. As most economic activities came to a halt due to the lockdown, the Indian rupee has depreciated a lot and is weaker than before vis-a-vis the US dollar. And it is expected to weaken further over the rest of the year as the effects of the pandemic unfold gradually. The weaker rupee is a key factor in gold prices moving up.

In 2019, around 33 to 35 tonnes of gold was sold on Akshaya Tritiya (May 7). In the past two months, import of gold to India has dipped more than 73 per cent on a year-on-year basis. This March, India imported just 25 tonnes against around 94 tonnes in March 2019. Last year’s Akshaya Tritiya...

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