The coronavirus-driven steeper global economic downturn has seen the gold price surge, the highest hike in gold prices since March. The gold prices have hit high in the last week. On April 27, 2020, the gold futures have seen a surge up by Rs. 2,230 per 10 grams. Earlier, the prices of gold were up by 0.17 per cent. The trading of the gold was also above Rs 46,500 levels. However, the gold price sharply fell by about Rs. 1500 per 10 grams in the last two days.
These are the current gold prices in the last 30 days:
|Duration||24 Carat Gold – Rs. Per 10 grams||22 Carat Gold – Rs. Per 10 grams|
|Gold Rate Today||46,310||45,310|
|Average Rate – Last 30 days||44,200||41,796|
|Highest Rate – Last 30 days||47,760||45,320|
|Lowest Rate – Last 30 days||41,490||38,775|
Impact of gold price surge on gold loan products:
With the sharp increase in the gold prices, the demand for a gold loan has also risen. The fact that the borrowers can now get a gold loan for higher values, and there has been a reduction in the sale of other loan products has made the borrowers shift to gold loan products. It is thus no surprise that the sale of gold loan products is gaining more attention than the usual. To manage the demand for gold loan products amid the lockdown banks and non-banking institutions have initiated to make the process of gold loan digital.
Global impact of coronavirus on a gold loan: Underscoring the more profound implications of the economy the prices of gold rose to the highest since the last March in the US. While the government announced the $ 2 trillion relief package for the coronavirus, there has been a keen possibility of holding the gold in the stimulus package. While the prices of gold may also have fallen with the lifting of the economy, however, the global trading of gold is still hitting a seven-year high.
Why is gold loan preferable options for borrowers and lenders in the current scenario:
Banks and especially the small finance companies, are thinking about exploring the avenues of gold loan amid the pandemic outbreak. In the present scenario, when there have been curbs on the business, a gold loan is one of the safest investment options as well as a tool to handle liquidity crises. According to the World gold council, about 22,000-25,000 tonnes of gold is lying as an idle asset with the Indian households, thus leaving the massive potential for the gold market.
Initiatives that are taken amid the surge of gold prices:
To tackle the liquidity issues amid the lockdown, The Tamil Nadu State Apex Co-Operative Bank Limited has introduced the gold loan scheme for the citizens at a lower rate of interest. As per the latest plan, the valuation of the scheme will be done 10% higher than the standard value of the gold. The gold loan will be provided at a 6% rate of interest per annum which is lower than the usual rate of interest. Also, the borrowers will be offered an additional grace period of 3 months to repay the loan. Borrowers can get a gold loan ranging between Rs. 25,000 and Rs. 1 lakh. Also, Kerala-based gold loan provider-Manappuram Finance is planning to gain up to Rs. 500 crore.
Where can you get the best gold loan: You can find the best gold near me by comparing the rates of gold loan from different banks and non- banking institutions. The process of getting a gold loan is more relaxed, and you require minimal documents for a gold loan.
While there has been a gradual increase and fall in the prices of gold, however, the gold market looks positive. It has been expected that the demand for a gold loan will increase in the nearby future.