Gold prices have hit record highs in India, UK, Russia, Australia, Canada, South Africa and Argentina in August alone
Gold prices in India on Tuesday hit record highs at Rs 38,600 per 10 grams on back of a strong global trend and the Indian rupee slipping to a six month low of 71.40 versus the US dollar. Gold rates are now up 20 percent in this year and nearly 30 percent in the last 12 months.
India is not the only country where gold prices are hitting record highs. The yellow metal hit an all-time high in Argentina with the price hitting 84,558 peso as the country dealt with a surprise election outcome as President Mauricio Macri faced defeat.
In the United Kingdom, gold rates hit a record high spurred by fear of disorderly British exit from the European Union. Gold in pound sterling has gained 25% in past 4 months.
Gold demand has skyrocketed primarily due to risk aversion prompted by simmering trade tensions between USA and China. USA has proposed more tariffs from September 01 on Chinese imports. In addition to that the Brexit chaos, the USA–Iran standoff and the political turmoil in Hong Kong have been key factors. The resultant global economic slowdown has prompted buying in safe havens like treasuries, Japanese yen and gold. The yellow metal is also taking support from monetary policy easing from global central banks.
Gold prices have hit record highs in various countries on the back of a global economic slowdown
Gold prices have hit record highs in India, UK, Russia, Australia, Canada, South Africa and Argentina in August alone. Gold has been added to reserves in countries like China, Russia, Poland, Kazakhstan, India etc. These countries have bought 70 percent more gold in the first quarter of this year compared to last year.
Investors have flocked to gold exchange traded funds (ETFs) too where holdings increased by $2.6 billion in July to a total of 2,600 tonnes.
Major global banks believe that the rally has just started and the yellow metal is likely to see appreciation for the next couple of years. The commodity has seen moves of $30-40 per ounce on some days in August and therefore heightened volatility is what the market is preparing for.
First Published: IST