Explained: Why India gold prices are at an all-time high amid COVID-19 lockdown

INDIA WATCH

CNBC/Ankit Gohel/5-18-2020

“Gold prices in India rose over one percent on Monday to hit an all-time high of Rs 47,929 per 10 grams on the MCX amid a sell-off in risky assets and weak Indian currency. The domestic bullion prices surged tracking gains in the international yellow metal prices that were trading at levels highest in more than seven years. Silver futures in India also rallied 4 percent or more than Rs 1,900 to over 48,600 per kg.”

USAGOLD note:  It was not that long ago that some were predicting a collapse of demand and prices for gold based on a perception that India’s citizenry would not buy gold at record-high prices. We differed with that analysis some time ago arguing that demand would remain strong as long as investors in India believed it was a better option than the rupee.  The chart below of gold priced in rupee explains much about India’s current attachment to gold …

Chart courtesy of TradingView.com