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Are Precious Metals Undergoing a ‘Corrective Phase’?

Gold bars and coins

Global financial health and prosperity significantly rely on the value and price of precious metals today.

While metals like copper and rhodium have been plummeting for a while, 2020 saw gold skyrocket at unimaginable levels. Silver wasn’t far behind either.

In other words, 2020 was a year of glory for gold and silver traders and people who chose safe-haven investments through precious metal IRAs.

With an all-time high of $2075 in early August, gold became a dominant metal. However, it quickly skewed to downside later and fell to its lowest since July.

The fluctuations in the precious metals market make investors wonder whether they should look forward to seeing another record year in 2021 or whether it’s time to prepare for a continual downward trajectory. 

While the experts at the top gold and silver IRA companies can help investors choose the best options to invest in precious metals, the much-anticipated ‘corrective phase’ of precious metals depends on various factors. Here are some of them.

Will the Virus be contained in 2021?

It’s safe to say that the coronavirus pandemic and its economic impacts shaped the growth of gold and silver values last year. Therefore, 2021 is also likely to be all about containing the virus and its future variants.

If the new Biden-Harris administration and scientists, healthcare professionals, and epidemiologists succeed in combating the virus, investors might favor riskier assets, including ETFs, futures, and stocks. Consequently, it’ll negatively impact the precious metal prices.

On the other hand, if the government struggles to control the COVID-19 situation, investors will gravitate towards safe-haven assets like gold and silver, causing their prices to escalate yet again.

What’s the Stock Market going to look like?

The country’s economic vulnerability and constant market fluctuations have become asynchronous to the stock market and business wellbeing, especially among the private sector.

Despite various enterprises shutting down operations consistently, the US stock market remains sitting at its record high. However, the new Coronavirus variant may shape precious metals’ fate in 2021’s first quarter.

If the government resorts to more lockdowns during this unprecedented time, gold and silver may begin to thrive again.

Furthermore, the global economy may suffer due to struggling businesses filing for bankruptcies. It’s also an indicator of gold and silver prices moving higher.

What will the Federal Reserve’s Monetary Policy Imply?

The US dollar index will have a noticeable impact on precious metals this year.

We currently have an optimistic growth forecast for the US economy primarily due to the Biden-Harris economic recovery plan and the Federal Reserve’s monetary policy stance that predicts rapid recovery.

While an instant economic retrieval may impact gold and silver prices, the failure to implement policy changes may work in the precious metals’ favor.

All in all, the precious metals price and investment trajectory depends on how the country deals with the coronavirus situation.

If you’re skeptical about favoring risky assets, let us at Orion Metal Exchange help you make safe-haven investments by buying gold and silver bullion and creating precious metals IRA accounts. Connect with our experts today!

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