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2020 has seen a "phenomenal" inflow of gold-backed exchange-traded funds, sustaining an investment-led rally, but while ETF inflows are still anticipated to be strong, 2020's degree of inflows would certainly be hard to maintain.
Jim Steel, primary precious metals expert at HSBC, claimed that gold will balance a rate of $1,965 an ounce in 2021, owing to contending macroeconomic pressures; accommodative financial policy will remain to provide tailwinds, however a loosening up of geopolitical danger from a Biden Management will certainly relieve the cravings for gold.
" Gold is delicate to geopolitical danger," he said. "If we're going to obtain some rapprochement on the profession concerns between the USA and also the other nations, as well as it's not simply one nation, it could be from a number of, and also we likewise obtain a charm offensive from the Biden Administration to UNITED STATE allies or to others, as well as the geopolitical dangers boil down and there's progress made on the trade front, then that would certainly be unfavorable for gold."
0:00 – Key drivers of gold
4:39 – Physical gold market
6:06 – Bullish vs bearish instances for gold
13:48 – Equities vs gold connection
16:31 – UNITED STATE buck
17:28 – Gold cost target in 2021
18:27 – Seasonality
18:55 – ETF inflows
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A 'sober' 2021 gold price target; say goodbye to 'phenomenal' drivers - HSBC's Jim Steel
2020 has seen a “phenomenal” inflow of gold-backed exchange-traded funds, fueling an investment-led rally, but while ETF inflows are still expected to be strong, 2020’s level of inflows would be hard to keep up.
Jim Steel, chief precious metals analyst at HSBC, said that gold will average a price of $1,965 an ounce in 2021, owing to competing macroeconomic forces; accommodative monetary policy will continue to provide tailwinds, but an unwinding of geopolitical risk from a Biden Administration will ease the appetite for gold.
“Gold is sensitive to geopolitical risk,” he said. “If we’re going to get some rapprochement on the trade issues between the United States and the other countries, and it’s not just one country, it could be from several, and we also get a charm offensive from the Biden Administration to U.S. allies or to others, and the geopolitical risks come down and there’s progress made on the trade front, then that would be negative for gold.”
0:00 - Main drivers of gold
4:39 - Physical gold market
6:06 - Bullish vs bearish cases for gold
13:48 - Equities vs gold correlation
16:31 - U.S. dollar
17:28 - Gold price target in 2021
18:27 - Seasonality
18:55 - ETF inflows
__________________________________________________________________
Kitco News is the world’s #1 source of metals market information. Our videos feature interviews with prominent industry figures to bring you market-affecting insights, with the goal of helping people make informed investment decisions.
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