(Reuters) – After a spectacular year, precious metals are expected to make additional gains in 2021, with silver tilted to outperform, but analysts are increasingly cautious about the outlook for gold as it World economy is recovering from the impact of the coronavirus.
The pandemic provoked the storage of investors who wanted to protect their wealth. This, along with supply deficits, boosted gold and palladium prices by more than 20% this year, while silver rose 47% and platinum by 10%.
“We will see new record highs for gold and palladium (in 2021),” Philip Newman told Metals Focus consultants.
“But the silver will see the strongest gains,” he said.
(GRAPH: precious metals price performance in 2020 🙂
Traditionally seen as a safe place to store money, gold began to rise as economic growth slowed in 2019, but the pandemic accelerated concentration and, in August, prices peaked. record $ 2,072.50.
While demand for physical gold hammered as the virus forced closures, demand for investment increased, as reflected in the holdings of the world’s largest publicly traded fund, SPDR Gold Trust , which recorded its largest annual gain since 2009 of around 30%.
(GRAPH: participation in SPDR Gold Trust versus gold prices 🙂
Prices fell to about $ 1,900 as investors stopped buying and deployed vaccines against the virus, encouraging investment in assets that work well during periods of economic growth.
Huge government debt, negative real bond yields and threats of inflation and market turmoil, which support gold, will persist in 2021, said Ross Norman, an independent analyst. Gold could rise another 20 percent next year, he said.
(GRAPH – Real US yields versus gold 🙂
A safe haven asset like gold, but also an industrial metal used in products such as solar panels, silver rose from $ 18 an ounce in January to nearly $ 30 in August before falling to about $ 25.
Analysts say its dual role and higher volatility make it outperform gold as economic growth picks up and, as U.S. President-elect Joe Biden pushes toward clean energy, make more use of it.
(GRAPHIC: gold / silver ratio 🙂
Investors absorbed a surplus of platinum, which is also used in jewelry, industry and automakers to reduce pollution.
But they’re unlikely to do it again, especially because the supply, which fell due to the new coronavirus, is recovering, said StoneX analyst Rhona O’Connell.
This will likely drag down prices, which at around $ 1,000 an ounce are only slightly higher than at the beginning of the year.
The automotive industry uses four-fifths of palladium, which, like platinum, neutralizes engine emissions. It is used little for investment.
Years of undersupply brought prices to a record high of $ 2,875.50 an ounce in February. “The market thought it could run out of metal,” one trader said.
Most analysts expect the shortfalls to continue in 2021 as the global economy revives and car sales recover.
(GRAPHIC: performance of precious metals in 2020 🙂
Reports from Peter Hobson in London, Swati Verma and Sumita Layek in Bengaluru; edited by Barbara Lewis