Mumbai (TIP) : Gold, which lost its sheen to some extent in the second half of 2021, is likely to regain the glitter in the New Year and cross the Rs 55,000-per-10-gram level amid pandemic woes, inflation worries and stronger US dollar.

After a stellar run-up in 2020 when the yellow metal touched a record high of Rs 56,200 on the MCX in August, the prices are near Rs 48,000 per 10 gram now. This is roughly 14% lower from the all-time high and 4% lesser compared to January 2021 levels.

All said, the current level is still 3% higher than overall international prices, largely thanks to a weakening rupee. CommTrendz co-founder and CEO Gnanasekar Thiagarajan said the reason behind the underperformance this year was the rush of liquidity in the equity markets.

“Meanwhile, the possibility of more Covid restrictions being imposed for Christmas and New Year holidays loomed over several European countries as the Omicron variant spread rapidly. US health officials urged Americans to get booster shots, wear masks and be careful if they travel over the winter holidays,” Thiagarajan said.

According to him, tightening of rates would make the US dollar more appealing relative to currencies bound for relatively looser monetary policies such as the euro and yen.

Spot gold was at over $1,791 an ounce level in the international market while in India, MCX gold futures was at Rs 47,740 per 10 grams on December 29.

Meanwhile, other media report said that gold prices in global markets are set to record its worst performance in six years as rates today dipped below key support level of $1,800. Spot gold today fell 0.4% to $1,796.47 per ounce, pressured by a higher dollar and firm Treasury yields. It’s down more than 5% this year in global markets. Spot silver dipped 0.8% to $22.62 an ounce, platinum eased 0.7% to $961.35, and palladium fell 1.2% to $1,960.31, all set for their worst showing in several years.

“Gold continues to trade within the $1780-1820/oz range seen for last few days amid lack of fresh cues and lower trade volumes due to year-end holidays. Support from weaker US dollar and persisting virus risks and China concerns are countered by sharp rise in US bond yields and weaker investor interest. Gold may remain choppy trade reflecting larger market however higher yields may keep prices under pressure,” said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.