You may have heard that gold prices go up when the stock market is bearish. But why is the price of the yellow metal skyrocketing amid a record-breaking rally in the stock market?
Well, the major reasons are the potential US Fed rate cut in the coming quarters and China's aggressive accumulation of the precious metal. Other reasons include growing tensions in the Middle East and Central Asia, depreciating Rupee and uncertainties during the election year.
Gold prices were pushed up further on the Multi Commodity Exchange (MCX) on April 8. Gold futures, which mature on June 5, was pegged at Rs 70,981 per 10 gram on the exchange, surging .49 per cent over the previous close. Fresh positions built up by participants led to a rise in gold prices, PTI cited analysts as saying.
The price of 24-carat gold in Delhi on Monday touched Rs 71.430 per 10 gram. In Mumbai, it was recorded at Rs 71,280 per 10 gram and in Chennai, it was Rs 72,150 per 10 gram.
On April 5, Reserve Bank Governor Shaktikanta Das said India is accumulating gold as part of its forex deployment.
"We are building up gold reserves that is a part of our reserve deployment," Das told reporters at the customary post-policy review press conference here.
RBI reportedly bought 8.7 tonne gold in January, which is the highest in two years. Its gold holdings had touched 812.3 tonne at the end of January from 803.58 tonne in the preceding month, as per the World Gold Council.
