Gold continues to seesaw around the $1900 mark; Citibank analysts see silver at $40 over the next 12-months

(USAGOLD – 10/22/2020) – Gold continues to seesaw around the $1900 mark in the run-up to the U.S. election with safe-haven demand acting as a positive influence and ongoing gridlock over the stimulus package acting as a deterrent. Overarching all, pandemic infections have begun to climb again in both the United States and Europe. The metal has been stuck in a $50 range on either side of $1900 for the past 30 days. This morning it is trading at $1914 – up $8 on the day.  Silver is up 7¢ at $24.87.

Citibank is out with a fresh report on the precious metals market saying investor interest will “remain high during 2021 as pressure on governments to devalue currencies, concerns about vaccine efficacy and take-up rates and questions over equity and bond valuations and rising global debt remain in most scenarios.” The investment bank’s view on silver is notably “very bullish,” according to a review of the analysis posted at the Forbes web site. It sees silver’s price rising to $40 over the next 12-monhts with “$50/oz a very realistic target and $100/oz possible,” according to the report.

Chart of the Day

line chart showing two monetary eras 1915-1971 and 1971-2020Chart courtesy of • • • Click to enlarge

Chart note: We have had quite a few new visitors over the past several weeks who are looking into gold for the first time, and this chart more than any other, we feel, is central to understanding why gold continues to make sense as a long-term portfolio holding. When the United States abandoned the gold standard in 1971 and freed currencies to float against the dollar, the fiat money era began. We are still in that era today. This chart shows the performance of gold from the early 1900s to 1971 when gold-backed the dollar and the era from 1971 to present when it did not. Gold has had its ups and downs since 1971, but clearly, over the long run, in the absence of an official gold standard, individual investors have been well-served by putting themselves on a private gold standard.

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