The global economy continues to contract because of lockdowns and other restrictions in several countries. With the situation is moving from bad to worse amid the sharp increase in new Covid-19 cases, the pandemic has challenged growth in the global economy. For India, Goldman Sachs has forecast its gross domestic product (GDP) to contract by 5 per cent during the financial year 2020-21. Other global agencies, too, have made similar predictions.
The gold price for delivery in June reported a marginal decline of 0.3 per cent in the late afternoon trade on the Multi Commodity Exchange (MCX), but returned to positive territory in the early evening trade. After volatility, the gold price stabilised at Rs 46,720 per 10 gram in the early evening trade, a marginal gain of 0.14 per cent from the previous close. Silver for delivery in July, however, fell 0.06 per cent to trade at Rs 47,670 a kg.
"There is a huge inventory of imported gold with jewellers because of the closure of factories and retail stores. Hence, both retail and bulk demand remains weak. But long-term fundamentals are bullish for gold, with its price likely to hit Rs 65,000 per 10 gram by the end of the current calendar year. With the presidential election in the US due in October and the rising trade tensions between the US and China, gold may find strong support from investors," said Kishore Narne, associate director, Motilal Oswal Financial Services.
The gold price in the international market rose 0.01 per cent to quote at Rs $1,734 an oz on Tuesday. Silver also moved in tandem to record a gain of 0.06 per cent and close at $17.1 an oz.