Gold prices in the futures market on MCX in today's trade (January 20, 2021) again topped a price of over Rs. 49000 per 10 gm. And this is after Janet Yellen, US Treasury manager on Tuesday advocated a larger fiscal stimulus to tackle the fall out due to the pandemic. And this strengthens gold's appeal as an inflationary hedge and in turn caused weakness in dollar.
In the previous day, Janet Yellen said that the benefits of US huge bail-out shall be more pronounced than an increase debt.
At around 9:22 am, gold on the MCX quoted at Rs. 49120, up Rs. 137.
Nonetheless, in the near term, there is seen limited upside in the yellow precious metal owing to some strength in dollar as well as increasing US treasury yield.
" Gold at $2,000 is still achievable, probably by the mid of second quarter, when a good amount of people get inoculated and there is so much cash in the system with demand almost coming back to normal, people will start looking at inflation very closely," Lee , an economist at OCBC Bank said.