Gold drifts higher; MKS Pamp sees the metal at $2300 in 2021
(USAGOLD – 1/19/2021) – Gold seesawed around the $1840 level in quiet overseas trading with little in the way of news to nudge it more convincingly in one direction or the other. Incoming Treasury Secretary Janet Yellen will testify before Congress today as part of her confirmation process, but not much is expected in the way of surprises. As it is, the dollar, one of the subjects she is expected to address, is trading lower, bond yields are rising, and gold is drifting slightly higher – up $1.50 in early trading at $1841. Silver is up 16¢ at $25.20. In MKS Pamp Group’s just-released Precious Metals Forecast 2021, Frederic Panizzutti, who manages the refiner’s Dubai office, forecasts a strong recovery for gold in 2021.
“We expect 2021 to be another bullish year,” he writes. “While the global economic recovery shows some positive signs, we will continue to face uncertainties especially in the first half of the year. In the context of low global real interest rates, a slow recovery in growth, higher market volatility and a weakening USD, gold shall remain an asset of choice in investors’ portfolios as a safe haven and insurance against disruptions. More inflows into ETFs and increased physical demand, especially towards the second half of the year, shall comfort the upside trend. We expect gold to hit a new all-time high at 2300.00 USD/Ounce.”
Chart of the Day
U.S. Dollar Index
Chart courtesy of TradingView.com • • • Click to enlarge
Chart note: A flight from safe havens drove gold’s selloff over the past two weeks – that departure, principally from the bond market, added high octane to the speculative stock market frenzy. Many analysts believe that the most dangerous outcome from current Federal Reserve policy will be a sharp decline in the dollar. Over the past twelve months, the U.S. Dollar Index is down 7% and 11.5% from highs this past March.