This week, Your News to Know rounds up the latest top stories involving gold and the overall economy. Stories include: StoneX’s bullish outlook for gold in 2021, low interest rates to support gold for years to come, and a rare gold coin fetches $9.36 million at Texas auction.
StoneX: Expect gold to trend up for at least another six months
In their outlook for 2021, commodities and foreign exchange trader StoneX said that gold should continue trending upwards throughout the first half of 2021 on the back of numerous powerful drivers. These include economic risks and uncertainty as well as geopolitical turmoil, both domestic and international.
As the firm noted, last year saw precious metals emerge as the best-performing commodity group with a 27% rise year-on-year. Silver and gold supported each other’s prices as investors looked for a hedge amid conditions that seem to have very much poured over into the new year. In particular, StoneX sees additional stimulus by global central banks and the accompanying rise in inflation expectations as prominent vehicles for an extension of the bull run.
“The United States, the European Central Bank, and the Bank of Japan have all been active with combined asset growth of over $7 trillion last year. With Congress’ approval of a $900 billion virus relief package in the United States (tied to the $1.3 trillion government funding program) there is more liquidity coming; Europe may follow suit, while Japan is looking to extend support for the corporate sector,” explained the firm.
More than inflation on its own, StoneX noted that its effect on real rates will continue driving money managers to utilize gold as a hedge, especially due to the threat of a stock market correction…
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