Gold prices soared Wednesday hitting a record high of Rs 50,010 per 10 gram in India as the yellow metal’s appeal as a hedge against inflation rose amid expectations of more stimulus to boost economies of countries hit by the Covid-19 pandemic.

This is the first time gold prices in India have touched Rs 50,000 in the futures market as prices surged 1% or about Rs 500 in the previous session.

September silver futures on MCX jumped 6.6% (approximately Rs 3,400 per kg) to Rs 61,130 per kg.

European Union leaders on Tuesday sealed a 750 billion euro recovery plan, while White House officials and top congressional Democrats discussed a next round of relief that would include extended unemployment insurance and more money for schools.

A Reuters poll showed that gold could push towards record highs over the next 18 months as the pandemic encourages investors to hoard it as a hedge against possible turmoil in wider markets.

But gold’s price rise has dampened retail demand for the precious metal in India, the world’s second largest consumer of the precious metal. The share of investment demand is less compared to retail purchases.

India’s gold imports in the June quarter plunged 96% from a year earlier to 13 tonne after shipments virtually halted in April and May.

(With input from agencies)