Most of the issues that supported gold’s rally in 2020, are carrying over into the New Year. In fact, the metal could easily outperform again, especially with central banks saying they’ll keep rates low, and provide necessary liquidity. In addition, gold prices could rise further with more stimulus likely to weaken the U.S. dollar.
Analysts at Citi for example have a $2,500 price target, comparing its catalysts to that of gold’s rally between 1970 and 1980. Not only could we see a weaker dollar, but inflationary risks, falling real yields, and the potential for further market volatility.
“The conditions that drove gold to an all-time high this year are very much still in place. I think it’s just natural that once you get to an all-time high in an asset class, there’s some consolidation afterwards and that’s what we’re seeing right now in terms of the price. But the fundamental conditions are still here and I believe that they will be here for the next 12-15 months minimum as well,” said GraniteShares founder and CEO, Will Rhind, as quoted by CNBC.