Are Gold Prices on Course to Break All-Time Highs Once Again?

12.21.21 - Gold: On Course to Break All-Time Highs?

Gold last traded at $1,788 an ounce. Silver at $22.52 an ounce.

NEWS SUMMARY: Precious metal prices traded mixed Tuesday amid a minor Wall Street relief rally and firmer dollar. U.S. stocks rebounded from three days of losses amid fears about the fast-spreading Covid omicron variant.

International Banker--"Gold was one of the star performers throughout much of 2020. But with concerns over the impact of the coronavirus abating throughout much of 2021, bullish sentiment for the yellow metal had decisively cooled off by the third quarter.

But today, with yet another strain of COVID threatening to send much of the world into a restrictive state once more, will the safety that gold has historically offered during such times of crisis elevate its price again, perhaps even eclipsing last year's record highs?

Gold remains among the world's most recognized safe-haven assets during periods of market turmoil, and investor interest in the precious metal tends to soar when there is more uncertainty - and more potential volatility - surrounding traditional financial markets, such as equities and bonds, than is normally the case.

This was certainly apparent in 2020 as the coronavirus pandemic panicked global markets, particularly during the first quarter. By early August, the bullion's price had reached an all-time high of $2,067 per ounce (/oz) and remained distinctly elevated above $1,850/oz throughout much of the remainder of the year....

Gold did climb above $1,850/oz in mid-November, however, with the surge in inflation in recent months prompting gold investors to turn to the bullion to hedge against rising prices.

'Looking ahead, we see risks of further strength in [the consumer price index] in early 2022, which could stoke even stronger demand for gold,' UBS noted on November 12...Similarly, commodity strategists at ANZ (Australia and New Zealand) Banking Group stated on November 16 that higher inflation expectations contributed to more gold bullishness."