Gold prices in India hit a record high on Wednesday, tracking a global rally, as expectations of more stimulus to resuscitate pandemic-hit economies lifted the metal's appeal as an inflation hedge.
Local gold futures reached an all-time high of Rs 50,060 per 10 grams, taking their gains to over 28 per cent in 2020 after rising a quarter in 2019.
However, the price rise dampened retail demand for gold in India, the world's second-largest consumer of the precious metal.
In the overseas market, spot gold jumped more than 1 percent on Wednesday to its highest in nearly nine years, driven by a weaker dollar and safe-haven buying.
The price rise has been dampening retail demand, although lately investment demand is improving, said a Mumbai-based bank dealer with a bullion importing bank.
"But the share of investment demand is very small compared to retail purchases."
India's gold imports in the June quarter plunged 96 percent from a year earlier to 13 tonnes after shipments virtually ground to a halt in April and May.
Local silver prices jumped nearly 6 per cent on Wednesday to 60,782 rupees per kg, the highest in 7.5 years
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