Gold Prices Have Soared. Expect More of That in 2021

Gold last traded at $1,870 an ounce. Silver at $24.60 an ounce.

NEWS SUMMARY: Precious metal prices advanced again Tuesday, gaining over 5% so far in December, amid rising uncertainty and a falling dollar. U.S. stocks fell as traders kept an eye on negotiations for additional fiscal stimulus while the U.S. coronavirus caseload continued to rise.

Saefong/Barrons--"Gold prices have climbed sharply in 2020, but they are still off more than 10% from the record high in August. The moves cap a year rocked by a pandemic that led to economic restrictions and fiscal stimulus measures, feeding the precious metal's appeal as a haven investment.

Many of these same reasons are expected to lift prices in the new year. 'It is likely that the uncertainty of how the economy is going to recover and how fast and large the recovery will be, coupled with increasingly historical levels of fiscal and monetary stimulus, puts gold on the path of a bull run for several years,' says Ed Moy, a former director of the U.S. Mint, who is currently chief strategist at gold seller Valaurum....

For the year, soaring debt ratios in major economies and 'monetary and fiscal stimulus leading to increases in money supply' were the top two factors for gold's rise, says Peter Grosskopf, chief executive officer of Sprott. 'Heightened uncertainty and fear due to the pandemic' ranked third, though he believes Covid-19 accelerated the first two factors.

To Moy, however, the pandemic and the economic uncertainty it caused, increased demand for haven assets, and the limited supply of gold, along with massive amounts of stimulus measures in a short period, were the key reasons for gold's gain this year....

Grosskopf sees the recent pullback in gold as 'a healthy correction and a buying opportunity,' for investors. In 2021, prices should rally to more than $2,000, with a climb to fresh record highs by mid-year, he says."