Although the coronavirus pandemic has certainly created a bullish environment for gold, as well as its metal counterpart, silver, the latter has still managed to outperform the sought-after safe haven asset in 2020.
Throughout 2020, gold has been the subject of historic gains, which were largely fuelled by US dollar weakness, low interest rates, and inflation expectations. Albeit there have been some fluctuations throughout the year, the yellow metal finished with an additional 6% increase by the end of December. Indeed, gold prices have surged by almost 25% since the beginning of the year, making 2020 the best year since 2010 in terms of annual returns.
However, the precious metal’s strong performance is still not as impressive when compared to silver, which also has been the subject of significant gains throughout 2020. On a year-over-year basis, white metal prices advanced by more than 50%, amounting to the largest annual increase in more than a decade. Likewise, other metals also basked in the ambiance of pandemic-induced gains, with copper rising by 26% year-over-year, palladium surging by more than 20%, and platinum climbing by approximately 10%.
An increasing number of analysts anticipate that gold prices will continue to rally in the new year, although additional gains will be less pronounced compared to the 2020’s record highs. Goldman Sachs, Commerzbank and CIBC project that bullion prices will exceed $2,300 per ounce in the new year. As well, Morgan Stanley notes that precious metals’ performance will be dependent upon the state of financial markets and longer maturity bond yields.
Information for this briefing was found via Business Insider. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.