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

Looking ahead to 2021, the monetary macro backdrop and fundamental drivers for precious metals are likely to remain favorable. 

The Fed has effectively taken a rate hike off the table for 2021 and beyond. It has no plans to curtail its $120 billion in monthly asset purchases.

And the federal budget deficit will continue to skyrocket under the next administration – perhaps to $4 trillion per year.

Uncertainties remain and investors should be prepared for anything. We still don’t know how exactly the globalist Great Reset will play out.

Part of the agenda, though, is a reimagining of monetary policy to include globally coordinated central bank action on climate change and social justice – whatever that’s supposed to mean. 

The Fed may begin more formally embarking on Modern Monetary Theory -- or print-on-demand financing for government. 

It has already announced it will no longer pursue price stability as it used to be understood. Instead, central bankers will allow prices to run above their 2% target for an undefined period before they even think about tightening.

As the virus fades later in the year, inflation risks may come into focus. Of course, at the core of any inflation protection strategy is physical gold and silver.

Silver could also benefit from rising industrial demand as the economy improves and officials push more aggressively for “green” energy. 

Solar power and battery technologies are experiencing explosive growth, and with that growth comes a need for lots more silver. In fact, solar panels are one of the fastest growing sources of silver demand.

Some analysts expect to see widening supply deficits for silver and platinum in 2021 as the battered mining industry struggles to increase production.

A new nominal high in silver could be in the cards for 2021. And the gold price could begin to trade sustainably above $2,000 an ounce. That could happen quickly if it gets off to a good start to the year.

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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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