April was another volatile month for the yellow metal due to the events related to the COVID-19 pandemic.
On 30 April, gold futures (June 2020) on MCX (Multi Commodity Exchange of India) closed at Rs 45,733 per 10 gram, the fourth straight day of losses for the metal, however, it made a monthly gain of 5.93 percent.
In the international markets, based on the most-active contracts (as per Dow Jones Market Data), gold prices were up 6.1 percent, the highest since August 2019- back when an escalation in US-China trade war caused rates in India to touch new-highs. US gold futures (June) settled the month at $1,694.20 an ounce.
In comparison, prices rose at 1.9 percent in the month of March, and 4.8 percent for the Jan-Mar 2020 quarter.
In April, gold price in India touched a new all-time high of Rs 46,385 per 10 grams. The domestic rates are based on changes in international prices and the exchange rate of the rupee as most of the country's demand is met through imports.
While the COVID-19 related measures hampering the global economy caused a surge in demand for gold investment (as it is a safe haven asset), the Indian rupee touching new lows pushed prices in India higher.
Further, despite news of successful trials of remedial drugs and vaccines for COIVD-19 that cheered the stock market towards the end of April, gold is likely to receive continued support as analysts expect global central banks keep stimulus measures in place for a longer time to support the growth of their economies.
On Thursday, the Euro Zone reported a 3.8 percent contraction in its GDP (gross domestic product) for the first 3 months of 2020.
The already slowing economic growth across the globe due to trade war and other geopolitical tensions will be severely affected by the measures taken to curb the spread of COVID-19 that has killed over 3 lakh people worldwide.
Separately, France, Spain and Italy, the three most virus-infected countries in the European Union, reported a decline of 5.8 percent, 5.2 percent and 4.7 percent, respectively for the first three months of 2020.
The current quarter is expected to be much worse not just for Europe but all major economies, including India, as lockdowns bring economic activity to a halt.
In a press conference, ECB (European Central Bank) President Christine Lagarde said that the eurozone economy could fall between 5-12 percent this year.
Meanwhile, the latest demand trend report, World Gold Council said that there has been an 80 percent year-on-year increase in total global gold investment demand, which includes bars, coins and gold-backed ETF investments, in the March-ended quarter to a four-year high of 539.6 metric tons. It said that the rise in demand was largely because of safe-haven buying.