Will gold prices set a new record this year?
Experts say that due to the increased demand for gold savings and investment, the price of this precious metal could return to the $2,000/ounce mark this year.
Barrick Gold - one of the world's largest gold producers is expecting its stock to rise along with the rally ingold pricein the final months of 2021. Barrick Gold said the average real gold price in the second quarter of 2021 was $1,820/ounce, up nearly 2.5% year-on-year.
Despite the rising gold price, the gold producer’s production has been falling. Barrick Gold said it produced 1.041 million ounces of gold in the second quarter of this year, down more than 5% from a year ago.
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| Gold prices are expected to continue to climb from now until the end of 2021. |
Kitco News quoted Florian Grummes, CEO of Midas Touch Consulting, as saying that if history repeats itself, the rapid expansion of central banks' balance sheets will lead to massive inflation in asset prices and consumption, then investors will flock to precious metals for "safe haven", including gold. Expert Florian Grummes said that this precious metal will reach a new all-time high this year.
On Capital.com, experts said that due to the increased demand for gold accumulation and investment, this precious metal could return to the $2,000/ounce mark in 2021, after reaching its all-time high of $2,063/ounce in August 2020.
Gold and theprecious metalGold is often seen as a safe haven for investors during times of economic uncertainty. The volatile stock market environment and expectations of fiscal tightening by central banks are limiting the market's upside. The outlook for the gold market for the rest of 2021 is considered quite bright. There are two main drivers supporting the upward trend in gold prices: investment demand and consumer demand.
Unlike currencies, gold prices are less affected by currency fluctuations, low interest rates and rising inflation as investors seek to preserve the value of their capital. Gold prices have been on a sustained upward trend since mid-2018, surpassing the peak set in September 2011 and reaching an all-time high in August 2020. At that point, gold prices were up 35% from the start of 2020 and up 40% from the low in March 2020.
On a quarterly basis, gold prices have risen in 16 of the 22 quarters since the start of 2016. Gold initially plunged in late March 2020, when the Covid-19 pandemic broke out, triggering a sharp sell-off across many asset classes. However, gold quickly re-established its safe-haven status, recovering in early April 2020 before moving to new highs.
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| The cryptocurrency market surged to an all-time high in Q2 2021, causing some to shift their attention away from gold. |
Unprecedented economic stimulus measures introduced by governments at the start of the pandemic have sent gold prices soaring. However, some analysts say interest in gold investment has also been influenced by the rise of cryptocurrencies, with Bitcoin being viewed as “digital gold.”
Gold prices are also influenced by physical demand for the precious metal, which is used in electronics, medicine and decoration, as well as in jewelry. In the world’s largest gold consumer markets, China and India, gold jewelry purchases are highly seasonal. Festivals and weddings in India and China are held in the second half of the year, which drives up consumer purchases and prices.
However, the Covid-19 pandemic has disrupted trading activities and reduced people's income in 2020 and 2021, causing the increase in gold prices to slow down compared to previous years./.
