Gold surges above Rs 70,000 for first time

Gold above Rs 70,000: Gold prices surged to a new record high, surpassing the Rs 70,000 per 10 grams mark. In the domestic market, the price of gold soared to Rs 70,500 per 10 grams, marking an increase of Rs 1,000 in just one day.

Internationally, spot gold prices reached $2,233.48 per ounce on Friday, reaffirming the status of gold as a high-yielding asset class.

The milestone of crossing the Rs 35,000-mark was achieved in 2019, when gold settled at Rs 35,035. Over the span of four years, nine months, and seven days, gold prices have surged by 101.2 per cent.

Various factors have contributed to this spike, including inflation in the US, central banks augmenting their gold holdings, geopolitical tensions, and anticipated rate cuts by the US Federal Reserve.

The recent report by the US Commerce Department indicated a 2.5 per cent increase in the Personal Consumption Expenditures (PCE) inflation measure in February compared to the previous year, driven by higher fuel prices. Moreover, expectations of a 75-basis-point rate cut by the US Federal Reserve have also fuelled the rise in gold prices.

Since March 29, 2023, when gold was priced at Rs 61,000 per 10 gm, it has yielded impressive returns of 15.5 per cent, solidifying its reputation as a safe investment and a hedge against inflation.

However, the surge in prices has led to a decline in demand for jewellery within the country. Gold prices have risen by Rs 5,000 in 2024 alone, starting from Rs 65,500 on January 1. Jewellery sales have been subdued, with most purchases revolving around the recycling of old gold, according to retailers.

Analysts predict that gold prices will maintain the Rs 70,000 mark and continue to climb higher, given the prevailing global economic and geopolitical uncertainties.

(With agency inputs)