Will Gold Go Up In 2021?: This Year's Price Outlook
2020 was anything but a stable year, with COVID-19 and other global economic problems. This has made gold shine a bit more than usual causing many to wonder if gold will go up. With increasing political and economic uncertainty, this metal is looking for a promising year in 2021.
Still, things are starting to shift again. Based on the recent global events and the future outlook, we will go over the potential price fluctuations that may occur this year.
Recap For Last Year
Last year in 2020 was a year of clear momentum in the price as even the year before in 2019, we saw the same. The geopolitical conflicts around the world, the price remained strong. While an event like this would die down, others such as COVID-19 gave another reason to look into this investment type. Reaching a high of $2,075 in August 2020, the momentum is clear.
Outlook For This Year
The go-to case for gold prices to increase usually hangs on its usefulness as a hedge against inflation. When the cost of living goes up, gold usually is not far behind in value. With the stock market as active as ever since the Gamestop stock incident, investors may look to a more stable investment such as metals. Other factors to consider:
- Under President Joe Biden, if the Federal Reserve focuses on quantitative easing, the US Dollar can fall even more in value.
- Silver was attempted to be shorted in 2021, causing great movement in its price.
- This year's geopolitical issues aren't looking to calm down with China and the U.S. going head to head,
- The global pandemic is continuing into this year impacting global markets.
- While gold isn't interesting Millennials as much, Bitcoin and other alternative assets are jumping out in popularity.
Why Invest in the Metal Gold?
While sometimes it's more expensive, other times it is more affordable – which makes investors see it as a certain risk. However, the benefits of this metal should not be overlooked if you plan on secure long-term investments.
A Market Investment Against Inflation
Simply put, despite all the speculations, gold is still one of the most popular precious metals for investing. It's a symbol of wealth and value, and it hedges against inflation as it diversifies your portfolio. Despite its fluctuations in every country, people still hold a special interest in this precious metal.
Gold Price Forecasts For This Year
Those who have invested in gold are now hoping that the price will go up for this year – therefore bringing some profit from their purchase. However, do their hopes hold any foundation or should they go for other precious metals like silver or palladium instead?
U.S. Financial Markets: Do They Hold Up?
To determine that, we might need to look at several other factors. For example, in the United States, the fiscal situation is dire enough to be bad on the U.S. dollar, causing it to drop in value.
America has now hit a public debt of $27 trillion, causing the financial situation to be headed down a cliff resulting in some wondering if the Dollar is in a bubble. Plus, considering that around $1.5 trillion of this will require refinancing by the time 2022 turns a corner – at higher interest rates – it is quite possible that the bond yields will stay high.
The interest rates also seem to be growing as an attempt to repay debt. Still, this is good news for precious metal investors, as it will bring value to the investors.
Factors to Consider For Investors
Plus, with the global pandemic and other economic uncertainty in the global arena, gold is fairly much the safe haven for any investor. Consider these benefits:
- Security against global economic and political uncertainty.
- Hedge against inflation.
- The long-term choice for diversifying investments.
As a Long-Term Choice
This metal is ideal for those looking to both protect their investment and have it increase over a long period of time. Precious metals are a great investment vehicle for those looking to diversify a portion of their portfolio to hedge against inflation and any market uncertainty. While not usually a huge part of a portfolio like stocks or bonds, it is still important to consider so that you have your eggs in more than one basket.
As this investment type can be seen as a long-term strategy, it is important to remember to not expect short-term gains generally. Things to look out for definitely is the global virus and its impact on the economies of countries. This will definitely have a lasting effect for years to come. Getting in early now maybe something to consider if you are looking for a long-term secure gain. Stocks so far this year have seen fluctuating movement and is seeing investors looking to purchase more than one item instead.
Final Thoughts on Gold Prices This Year
Bottom line, will the gold price increase in value? Although there is no true answer, we can speculate based on the global events mentioned above. It is also important to remember that stock market prices are volatile while gold tends to stay less volatile. This is why this metal tends to be an interest for investors looking to at least diversify their portfolios. However, as the currency seems to be losing its value, and the countries are entering economic turmoil, there is a very high chance that prices will fluctuate this year. Focus on the User will keep a close eye this year on precious metal prices based on global events.