Gold Price Forecast 2021

Underlying Factors Key, Covid-19 to Stay in Focus

Gold outlook 2021 and

Gold Stocks to Watch! 

Recently Gold Investing News, INN has published the gold outlook 2021 as Gold Price Forecast and Gold Stocks to Watch! The report said the gold market saw a flurry of activity in 2020-while the yellow metal sunk to a seven month low in March; it later rocketed to an all-time high in August. 

After gold breached the US$2,060 per ounce mark, many believed it would continue to move higher. Its price has instead pulled back since August and was at around US$1,850 as of mid-December. As global markets reeled from the uncertainty caused by Covid-19 disruptions, risk aversion and safe haven buying fueled an overall 38 percent uptick for gold from its lowest to highest point in 2020.

Vaccine news has weighed on prices since mid-November, but with mass vaccination in the US and Canada not anticipated until April at the earliest, Covid-19 is expected to add continued volatility well into 2021. Read on to learn how experts think the virus and other factors will impact gold next year. 

As many analysts have noted, a higher gold price indicates economic challenges, and that was especially true in 2020, a year that saw the yellow metal beat its previous price record high. 

"The pandemic invoked unprecedented economic uncertainty, which led to a surge in safe haven demand and, in turn, boosted gold prices," explained Steven Burke, an economist with Focus Economics. 

"Moreover, ample monetary stimulus measures globally to counter the economic fallout from the virus supported prices further as gold is a non-interest-bearing asset. He went on to note that "economic softening" during the second half of 2020 bolstered bullion demand. 

Interest rate cuts by the US Federal Reserve also served as a catalyst for higher demand due to gold’s "relatively high attractiveness as a non-yielding asset." All these factors were compounded by tense trade relations between the US and China, and geopolitical discord with Iran.

Kai Hoffman, CEO of Oreninc, noted that Covid-19 "just added fuel to the fire" in a year with US election uncertainty, monetary policy issues and foreign relations unrest. The gold price benefited broadly from the economic strife, although as Jeffrey Christian explained, there were also drawbacks for the sector as a result of the pandemic. 

"Covid-19 has affected every aspect of gold," said the managing partner of CPM Group. "It has reduced mined and refined metal production, fabrication demand, investment demand and the fundamental mechanics of buying, selling and moving gold around the world. The most dynamic effect has been on investment demand, which has more than doubled in 2020 from 2019 levels." 

Despite all the disruption that markets and commodities faced in 2020, gold is positioned to end the year 20 percent higher year-to-date. Experts agree that's largely because the trends in place pre-pandemic were fostering an environment of increased value for gold. 

"The economic recession and overall economic and financial issues (themselves affected by the pandemic)," were cited by Christian as other catalysts, as were "the political dysfunction in the US government, the UK government and elsewhere, and the reduction in market liquidity due to financial intermediaries either leaving or reducing their activities in gold." 

This sentiment was echoed by Adrian Day, head of Adrian Day Asset Management. He too believes Covid-19’s impact was a symptom of more significant and long-term economic issues. "It’s not so much Covid, but central bank policies in response to the economic response," Day told the Investing News Network. "Gold has not gone up because there is a global epidemic, but because global liquidity has shot up." ( Here is the choicest part of Gold Outlook 2021 report, rest will be uploaded time to time...)