The same catalysts that drove the metal above $2,000 in 2020 may still be in place.
For one, more stimulus may be in place. We could see higher inflationary risk, coupled with a weaker U.S dollar, and central banks saying they’ll keep interest low, gold could push higher.
Even Granite Shares founder and CEO, Will Rhind, as quoted by CNBC has said:
“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 Granite Shares founder and CEO, Will Rhind, as quoted by CNBC.
Meanwhile, central banks all over the world may be far more dovish, especially with the health scare. For example, the Bank of Canada and the U.S. Federal Reserve have said rate hikes are not likely at the moment. So it comes as no surprise that gold prices have the potential for $2,500. Analysts at Citi for example have a $2,500 price target, comparing its catalysts to that of the rally between 1970 and 1980. Others, like Frank Holmes, CEO at U.S. Global Investors have said, “It’s quite easy to see gold going to $4,000.