Gold prices are expected to remain strong in 2021
Xinhua News Agency, Chicago, January 1st, title: Gold prices are expected to remain strong in 2021
Xinhua News Agency reporter Xu Jing
Gold has always been a safe haven for investors.
The new crown epidemic is sweeping the world, the world economy is in recession, and geopolitical uncertainties have intensified. The rising US debt has triggered market concerns about the US dollar. In addition, economies have generally adopted loose monetary policies and interest rates have remained low. More investors have turned their attention to the gold market.
In 2020, international gold prices will fluctuate upward.
After the outbreak of the new crown epidemic, liquidity risks appeared in the international financial market. The price of gold fell first and then rose, and once saw a sharp correction; as market sentiment improved, gold prices resumed their upward trend since March, and rose significantly after July, and rose once in August. To an all-time high of more than $2,000 per ounce, it has since fallen.
On December 31, 2020, the main gold futures contract on the New York Mercantile Exchange closed at US$1895.1 per ounce, an increase of about 24% over the end of 2019.
Looking ahead to 2021, analysts predict that, given the fact that inflation, a falling U.S. dollar and expectations of ultra-low interest rates still exist, the price of gold will continue to rise in 2021, or will hit a record high.
With the gradual popularity of the new crown vaccine, the gold price trend will gradually stabilize.
Most institutions believe that with the rising number of new crown virus infections, the prospects for global economic recovery are uncertain, and the ultra-loose fiscal and monetary policies have also triggered market concerns about inflation. These factors will support the rise of gold prices.
A weaker U.S. dollar will also push up the price of gold in U.S. dollars.
On average, investors predict that the dollar will fall another 3% at current levels by the end of 2021.
Citibank even predicts that the dollar may plummet by 20% this year.
The continued recovery in demand for gold in emerging market economies will also push gold prices higher.
Goldman Sachs believes that India and other countries' demand for gold is gradually normalizing.
In addition, factors such as geopolitics and the effectiveness of the new crown vaccine will also affect the trend of gold prices in 2021.
The National Broadcasting Corporation Financial Channel believes that the factors driving gold prices higher in 2020 will continue for at least 12 to 15 months.
Citibank predicts that the international gold price will rise to US$2,200 per ounce in 3 months and to US$2,400 per ounce in 6 to 12 months.
Goldman Sachs said that it does not rule out the possibility of adjustments in gold prices in the short term, but in the long run, "gold will benefit from continued strong investment demand."