COVID-19 Pandemic

In March 2020, India entered one of the world's strictest national lockdowns as COVID-19 spread globally. The lockdown shuttered factories, halted transport, and brought economic activity to a near-halt. The effects on commodity prices were immediate, dramatic, and in entirely opposite directions for different assets.

Petrol demand collapsed — vehicles stopped, aviation halted, industries shut. Global crude oil prices fell so sharply that US futures briefly turned negative in April 2020 — an extraordinary event that had never occurred before. Indian petrol prices fell to multi-year lows before recovering as lockdowns eased.

Gold moved in exactly the opposite direction. As governments globally unleashed unprecedented fiscal and monetary stimulus — the US alone injected over $3 trillion into its economy — inflation fears drove investors to gold. Indian gold prices surged from ₹40,000 in January 2020 to ₹56,000 by August — a 40% increase in just eight months. It was the biggest single-year jump in India's recorded history, eclipsing even the crisis years of 1991 and 2008.

The Sensex, after crashing 40% in March 2020, staged one of the fastest recoveries in its history as stimulus money flowed into equities. The COVID year illustrated, more dramatically than any since 2008, how the same crisis can simultaneously destroy one asset's price while driving another to all-time highs — and how government policy response shapes commodity markets as much as the underlying crisis does.