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Gold on track to reach record £1,712 ($2,300) price point

Gold is firmly on course to reach record highs in the very near future, with a perfect storm of events and concerns set to propel the precious metal to a year-long growth streak in 2021, according to one industry insider who remains bullish on the prospects for gold in the near term.

While we saw markets booming on news of potential vaccines last week, creating one of the best buying opportunities of the decade as you will have seen in our special report, economic recovery is anything but a given, says the OANDA senior market analyst, Edward Moya.

If anything, 2021 is shaping up to be the perfect environment for a new gold rush he says, with lots of hurdles standing in the way of business as normal resuming. He notes, “We saw all these vaccine announcements these past two Mondays, which are just great news for the hope that we’re turning the corner, [but] the current shape of the economy is still going to warrant unprecedented stimulus and lead to a much weaker U.S. dollar next year.”

As we have seen this year, economic support packages and a weakened dollar have been buoyant for gold and there is no reason to suspect that will change in 2021. Moya says that as virus rates continue to soar unchecked, consensus is growing that the stock market will face an average of 3-5% losses next year as many businesses struggle to return to normalcy. This of course is something that will impact GDP and unemployment levels, again favouring strong gold prices.

He added, “The U.S. will start to see cases hit over 200,000 a day. And as these disheartening thresholds are being met in the U.S., more lockdowns will be triggered and that is going to be the catalyst for making Congress act. That is going to support the move into gold. People are going to be a little bit pessimistic. I would be surprised if we didn’t start to see gold trade between that $1,950 (£1,452) and $2,000 (£1,489) range. I would expect gold to make a fresh record high at some point in the first quarter of next year. We’ve gone through a decade without not really fearing inflation. And those risks are going to start to percolate. That’s why many people still look to gold to make that return to record-high territory.”

With the vaccine news still dominating, there is a strong opportunity to buy now before more stimulus packages ignite gold. Buy now.

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