Gold To $2,300 And Silver To $35 By Year End – 2021, The Year The Barometer Explodes?

  • The US dollar set for further dramatic declines?
  • Negative interest rate policy spreading.
  • Increasing global liquidity in an attempt to ignite a recovery.
  • Democrats’ win paves way for massive stimulus packages.
  • Gold and silver set to rally strongly in a perfect storm.

As the current wave of COVID-19 strongly takes hold, it has devastated the lives of individuals and created an uneasiness not just in individuals, but also in financial markets. It has turned a public health crisis in to an economic, financial, and in some cases, a political crisis.

We have watched as some of the most powerful democracies in the world struggle to maintain the very thing that defines them. All the while, gold watches and acts as a barometer for the perceived risk in the world. As it sat with a wise head throughout 2020 and signaled that all was not well, is 2021 the year that the barometer is set to explode?

Gold and silver prices closed December on a positive note, as gold gained 6.8% and silver gained 16.6% for the month. For all of 2020, gold gained 25.1% and silver gained 47.9%. The main rally for the year was from mid-March to mid-August, when both metals set the high for the year. 

Gold’s 2020 high was also a new all-time high, at $2,063.54 on Aug. 6. Silver’s 2020 high was $29.13 on Aug. 10. Silver’s all-time high was $48.49 on April 28, 2011. The March to August rally was driven by massive amounts of fiscal and monetary stimulus to offset the economic impact of the coronavirus-induced lockdowns.

The IMF estimates that governments have added more than $12 trillion in fiscal support. In addition to cutting interest rates, the five major central banks (the Fed, ECB, BoC, BoJ, and BoE) have added more than $8 trillion in assets to their balance sheets since March 2020 in order to support their respective economies during the COVID-19 pandemic. This compares to about $2.5 trillion in initial response from the central banks to the Great Financial Crisis in 2008-09.

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