Gold holds line at $1850. JP Morgan increases weighting in commodities and Metals Focus sees high $30s for silver by year end

(USAGOLD – 1/15/2021) – Gold continued to hold the line at the $1850 mark this morning, ignoring the massive Biden stimulus program and the ongoing political turmoil in the national capital. It is up $3 on the day at $1851. Silver is down 18¢ at $25.40. JP Morgan lightened up on its bond portfolio and raised its exposure in the commodities market, according to Bloomberg’s morning e-mail. “Commodities,” says the news service, “will benefit from strong economic growth and fading risks from issues like the trade war, pandemic, and Brexit.” If that be the case, silver, which enjoys status both as a commodity and a monetary metal, could be among the beneficiaries. Gaining 46% last year, the top performer in the commodities sector also outpaced all major investments, including the much-publicized NASDAQ index.

Nikos Kavalis, a founding partner in London-based research firm, Metals Focus, tells why he thinks the coming year could be a good one for silver. “Although the crisis did weigh on silver demand,” he says in an overview for 2021 published by the Singapore Bullion Marketing Association, it was less pronounced than for gold. This reflects silver’s lower reliance on price elastic and discretionary demand segments, being a largely industrial metal and with some offset from rising bar and coin demand in the West…Looking ahead, we have little doubt that the drivers of gold demand will also boost silver’s appeal to investors. In addition, owing to its typically more volatile nature, we would expect silver to outperform gold overall in 2021, peaking in the high $30s before year-end.”

Chart of the Day

Gold and Silver
(Full year, 2020)
overlay chart showing the percentage gains in gold and silver for 2020

Chart courtesy of TradingView.com • • • Click to enlarge

Chart note: For the record, here is the chart showing gold and silver’s percentage gains for 2020. Gold was up 24.21% and silver was up 46.3% – the top-performing major asset for 2020.

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