In the last one year if one asset class has been a true blue favourite of the bulls it has been gold. With a return in excess of 50% in the last on year, gold has clearly emerged as the star performer. In the global spot gold market the price of gold crossed $1943/oz. This is the first time that gold has scaled these levels since the earlier peaks of September 2011.

The rally was not restricted to international gold prices alone but to domestic prices too. In India, gold had touched all time high levels long back. On 27 July, the price of gold crossed Rs.53,500/10 gram. Domestic prices of gold are not only influenced by the global prices but also by strong dollar and this combination has spooked demand for gold in India.

There have been multiple reasons for this frenetic gold price rally. The sharp spike in the price of gold globally was led by the uncertainty surrounding the US-China trade war. Then there is also the likelihood of a prolonged slowdown in growth post COVID-19 as well as consistent debasement of currencies by major central banks across the world.