News Bureau

July 11, 2020

Gold price forecast of US$2000 in 2021

The psychological resistance of (gold) USD 1,800 per ounce has been surpassed!

At Precious Metals Watch, Georgette Boele, Precious Metal Strategist-ABNAmro observes,

1: Gold powers to an all-time high across a range of currencies,

2: Against the dollar, gold’s all-time high of USD 1,921 is now within reach,

3: The stars are aligned for gold prices to continue to rise,

4: Aggressive monetary policy easing, ultra-low interest rates, negative US real yields, fiscal.

5: stimulus and the technical outlook all support gold prices,

6: Nonetheless, positioning does remain extreme which could encourage volatility,

7: Our new gold price forecast for end 2020 is USD 1,900 per ounce (was USD 1,700 per ounce) &

8: Our new gold price forecast for the end of 2021 is USD 2,000 per ounce (was USD 1,800 per ounce).

She inks about gold price record, we had expected another risk-off wave in financial markets to support the US dollar and to result in temporary gold price weakness. Up to now, this has not materialized, Gold prices have rallied strongly and have set new all-time high prices versus a number of currencies, although not yet versus the US dollar. However, on 8 July gold prices cleared an important psychological resistance at USD 1,800 per ounce. Will gold prices rally to an all-time high of USD 1,921 per ounce, which was set on 6 September 2011?

Further, Georgette Boele learns a Bullish outlook but she said, potential volatility due to positioning! We recognize that the stars are still aligned for gold prices and therefore the momentum is very positive. But we are also concerned about positioning. Speculators temporarily reduced positions, but other investors have continued buying. Speculative positions are substantial and positions in ETFs are at an all-time high (see graphs below). If investor sentiment deteriorates, some of these positions will likely be closed. This will cause higher volatility in gold prices.

We still expect a sizeable correction in gold prices in a risk-off environment when the dollar is back in favor. It is likely that this correction will be short-lived and be a buy-on-dips for investors eagerly waiting to step in. After such a correction prices could rally again. So, we have adjusted our forecast to reflect this and the technical break of USD 1,800 per ounce. Our forecasts don’t reflect the near-term dip in prices we still expect, because this sell-off will be short-lived.

Our new year-end forecast is USD 1,900 per ounce (was 1,700) and the new forecast for the end of 2021 is USD 2,000 per ounce (was 1,800). We have also upgraded our other precious metal forecasts as higher gold prices also support silver and platinum prices.

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