Gold price today: Yellow metal rallied 25% in 2020; support at Rs 48,500

Gold, which rose more than 25 percent in 2020 to emerge as the top commodity in terms of returns after silver (up 45 percent) and copper (up 35 percent), was trading marginally above Rs 50,100 for 10 gm on January 1.

On the Multi-Commodity Exchange (MCX), February gold contracts were trading higher by 0.03 percent at Rs 50,165 for 10 grams at 0920 hours. March silver was trading 0.14 percent higher at Rs 68,200 a kilogram.

“Spot Gold ended marginally lower yesterday and ended the year with a gain of about 25 percent, its best since 2010. Gold benefitted from a weaker US dollar, huge ETF buying, and monetary and fiscal stimulus measures by major central banks,” Ravindra Rao, VP- Head Commodity Research at Kotak Securities said.

“While virus concerns and stimulus measures may continue to support prices in 2021, the biggest challenge would be the success of the vaccination programme in bringing the outbreak under control.”

COVID-19, weakness in the dollar index, US-China tensions, geopolitical tensions in West Asia and global growth concerns were the key drivers of gold prices in 2020.

Global central banks’ financial stimuli to bring the economy on track fuelled inflation and gold is the best hedge against rising prices, experts said.

“In the year 2020, gold prices gained around 28 percent, gold futures contract settled at $1,901.50 per troy ounce in the Comex division and at Rs 50,151 per 10 gram in the domestic markets,” Manoj Jain, Director (Head-Commodity & Currency Research) at Prithvi Finmart told Moneycontrol.

“We expect positive momentum in the gold to continue with the expansionary monetary and fiscal policy pushing inflation expectations up and with US real rates falling further in the year 2021, gold could test $2,000 per troy ounce levels in the first half of the year and $2,100 per troy ounce by the end of 2021,” he said.

Gold price today: Yellow metal rallied 25% in 2020; support at Rs 48,500 via @MasterMindUpdate
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