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Original Caption: Are Bulls Gaining Momentum? Investment Bank: Gold To Top $ 2,000 Next YearGold priceFull of momentum
Financial news agency FX168 (North America) reported that the gold market is struggling to regain a foothold above $ 1,850 an ounce, but one bank said gold prices still have enough momentum to rise by 2021.
In a 2021 outlook report released earlier this week, Yao Wenyu (transliteration), senior commodity strategist at ING, said that while vaccine news has prompted some people to sell gold shortly before the end of the year, precious metals The fundamental outlook for next year remains strong.
In the latest forecast, the bank predicts that the average price of gold next year will be around US $ 1965. The agency predicts that by the third quarter of next year, the price of gold will exceed $ 2,000.
“The short-term view of gold will largely depend on the timing and scale of the US economic stimulus plan and the progress of vaccine launches in the coming months. Although a vaccine is about to come out, given the recent wave of lockdowns, we see Some economies have experienced a second recession. “
Yao Wenyu said that inflation and interest rates are expected to have the biggest impact on gold prices next year. He quoted an International Group interest rate analyst as saying that they expect the nominal yield to be as low as 50 basis points, which is almost half the current level.
Yao Wenyu also said that even if nominal interest rates start to rise by the end of next year, real interest rates will remain low.
“Inflation expectations may outpace rising nominal yields, so real yields should weaken further, supporting our optimistic view for gold in the medium term,” he said.
Yao Wenyu said that although investment demand, especially investment demand for exchange-traded gold products, remains the most important factor in the increase in gold prices, he believes that as the world begins to recover from the new corona pneumonia epidemic, suppressed physical demand will rebound.
“The pent-up demand may strongly drive physical demand in 2021 as consumers will return to the market, especially holiday and wedding demand. Although price increases may deter some consumers, government stimulus measures and increased the proceeds can provide consumers with sufficient liquidity, thus increasing gold purchases. “
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