Gold futures on MCX opened above the Rs 39,000-level on Wednesday, starting the year 2020 on a positive note. The high levels appear to be an extension of gains seen in 2019.
Data suggests that in 2019, the precious metal produced the highest returns seen in nearly a decade, despite the new highs recorded in stock markets across the world.
Replicating global movement, gold prices in India also broke records in 2019.
On 31 December, US gold futures ended 2019 at $1,523 an ounce, recording an 18.9 percent rally for the whole year. This is reportedly its strongest performance since 2010 when gold was up by 29.7 percent.
Meanwhile, US Silver futures made its best returns since 2016 at 15.8 percent, according to FactSet.
In India, gold surged 25 percent on MCX in the last year and closed at Rs 39,100 per 10 gram on 31 December 2019.
The months-long US-China trade war, geo-political tensions, buying from central banks and an increase in investment demand for gold for risk-aversion were among the main factors that lead to a sharp surge in gold prices in 2019.
In India, gold futures hit an all-time high of Rs 39,885/10 grams on MCX at the start of September 2019 while retail prices in some cities crossed the Rs 40,000-mark.
However, amid a spike in prices and increase in customs duties, demand for the yellow metal fell among Indian buyers.
Analysts expect gold to continue gathering momentum in 2020 as global risks persist, however, inflows in the bullion market may only pick up pace if there are new factors which could push price up, now that the US and China appear to move towards truce with their trade deal.