Predictions for Gold & Silver in 2021

As the COVID-19 pandemic ravaged countries around the world in 2020, trillions of dollars were pushed into the financial markets. In December, Congress passed a second and long-awaited stimulus package to aid businesses and individuals. Consequently, economists and market analysts expect investors will brace for inflation in 2021.

Many market analysts predict precious metals will continue to be a safe-haven for investors, as the uncertainty of the pandemic remains strong and the U.S economy continues to need support.

Among the bulls predicting a resurgence in the price of gold is Goldman Sachs, which projects gold to reach $2,300 per troy ounce in 2021. The firm attributes the growth to inflation brought about by the recovery from the pandemic-related recession.

There is too much debt across the board, and the economy is not strong enough to begin to repay it. Financial repression is going to be necessary to reduce the debt, making gold the perfect hiding place from these measures.

Similarly, silver has been riding a wave of investor uncertainty with prices for the white metal on an upward trend since punching through the $25 per ounce mark on October 29, 2020, on its way to $27.25 per ounce on January 4, 2021.

Predictably, the bullish run is raising investor expectations but is it sustainable? While we can’t predict the future, our contentious political environment and economic uncertainty may be indicators that investors will continue to safeguard money in precious metals, supporting silver’s price.

Industry analysts at Metals Focus forecast the price for silver exceeding $30 per ounce in 2021, citing the stimulus packages, an uncertain economic recovery and the ongoing COVID-19 pandemic. The same concerns are evident in Europe, which is experiencing a record number of coronavirus infections along with renewed lockdown measures. These factors raise doubts about economic recovery, making the case for precious metals strong in 2021.

What Impact Will the Stimulus Have on Precious Metals?

On December 21, 2020, Congress passed a bill for a stimulus relief package to the tune of $900 billion with most Americans receiving IRS checks for $600. And while lawmakers are shelving a plan for $2,000 stimulus checks, for now, there is enough support for the measure that the newly sworn-in Congress may renew efforts to pass legislation for more relief aid.

What does this mean for precious metals? It means the mere fact the economy relies on a stimulus package for survival reveals the true state of the economy. The U.S. debt was already at record levels; now the two packages passed by legislators in 2020 are increasing the debt by another $2.9 trillion.

More debt requires more monetization by the Federal Reserve, driving down the value of the dollar. Historically, the price of precious metals generally increases as the value of the dollar decreases.

While there is no such thing as guaranteed performance, current indicators suggest precious metal prices will hold or rise for the foreseeable future.

Visit the Gold Peaks Gold & Silver Store

At Golden Peaks Gold & Silver, we pride ourselves on providing fair and competitive prices for your gold and silver. Our staff has a combined 60 years of experience in the coin and precious metals industry. We’ll take good care of you whether you’re an experienced seller or it’s your first time selling precious metal.

If you have questions or would like to learn more, we invite you to come visit our store. We’re conveniently located in the Bowles Marketplace in Littleton. If you would like to speak with an experienced bullion specialist, call Golden Peaks Gold & Silver today at 720-696-6750.