On Tuesday, gold prices in India continued to climb, mirroring gains in the international market. On MCX (Multi commodity exchange of India), gold futures touched a high of Rs 52,435 per 10 grams.
The gains are a reflection of the new record high of spot gold, the global benchmark for the precious metal's prices, which rose 1.1 percent $1,966.76 an ounce in early Asian trade on Tuesday as a weaker US dollar and hopes of more stimulus measures to combat the economic blow from the pandemic drove investors towards the safe-haven metal.
The US dollar index was down to a near two-year low, which may have curbed the surge in gold rates in India that are priced in rupees for consumers in the country but imported in the American currency.
The metal has become a favourite among investors this year amid various uncertainties, especially those caused by the coronavirus pandemic. Hopes for a quick recovery from the COVID-19 outbreak have definitely dialled down as the number of new infections reported every day continue to rise.
The number of confirmed cases of infections in the world is now nearly 16.4 million while the death toll has surpassed 6.5 lakh. In India, COVID-19 has infected over 11.83 lakh people and killed at least 33,425.
As the world battles to curb the spread of the virus, China reported its biggest spike daily numbers since April this week.
In Asia, fresh lockdowns were imposed and in Europe, Britain imposed a quarantine on travellers returning from Spain.
To make matters worse, deteriorating relations between the US and China added to the global economic recovery uncertainty. China took over the premises of the US consulate in the city of Chengdu on Monday, as it ordered that the facility be vacated in retaliation for China's ouster last week from its consulate in Houston, Texas.
Further, in the US, Senate Republicans proposed a $1 trillion coronavirus aid package on Monday. Gold benefits from widespread stimulus measures by central banks because it is widely viewed as a hedge against inflation and currency debasement.