A Year Like No Other For Precious Metals … And Everything Else

Well, it’s been a year like no other in so many ways. “Unprecedented” is an often-overused term. But there truly is no precedent for much of what transpired in public health, politics, the monetary system, the economy, and markets.

More than 300,000 Americans reportedly lost their lives while infected with COVID-19.  Less widely publicized was a spike in deaths of despair due to lockdowns and related social ills that drove all too many into depression and drug addiction.  Or the deaths that were caused, or will be caused, by Americans putting off or avoiding doctor’s visits.

Amid all the suffering and turmoil, Wall Street celebrated new record highs in stocks. An unprecedented tsunami of liquidity generated by the Federal Reserve pushed asset prices higher across the board.

In late July, gold ascended to new all-time highs in nominal terms. Even the Wall Street-centric financial media had to stand up and take note

Gold prices lost momentum in the fall as rising equity markets stunted safe-haven buying. But the monetary metal still finished 2020 with strong gains – outperforming the S&P 500 for the year overall.

Gold ends 2020 at $1,900 per ounce. That’s a record high close for a calendar year and comes on the heels of a 25% annual gain.

Turning to silver, the market experienced an even wilder ride than gold in 2020. 

Silver got historically oversold versus gold in March at the height of the COVID panic. The gold to silver ratio spiked to an historical extreme of 130:1.  

At that time silver prices plunged briefly below $12 an ounce. Bargain hunters flooded into the bullion market, clearing out dealer inventories and driving premiums markedly higher.

Spot prices soon followed suit. Silver embarked on an epic rally that took prices all the way up near the $30 level in early August.

The white metal is finishing out the year at $26.50 an ounce to record a yearly advance of over 45%.   

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Disclaimer: Money Metals Exchange and its staff do not act as personal investment advisors. Nor do we advise about or advocate the purchase or sale of any regulated security, listed on any ...

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