New Variant Of COVID-19: What Does It Mean For Gold Prices In 2021?
Medical practitioners worldwide warned people about the mutating abilities of Coronavirus. Toward the end of 2020, one of the most dreaded solicitude came to life when a new variant, with a supposedly 70% higher transmission rate, dominated the world.
On one hand, the world is hopeful about economic recovery on a global level after the pronouncement of the COVID-19 vaccine, and on the other, reports about new variants reek global economic uncertainties.
Gold in 2021: Record High or Downward Trajectory?
One thing that’s certain is that the virus brought glory for precious metal investors. Here are some factors that are likely to influence the future of gold.
- If lawmakers reinstate lockdowns, traders are most likely to seek shelter in precious metals, given their inherent reputation of being safe-haven assets. This can cause gold prices to rise.
- Federal Reserve is more optimistic about the economic recovery of the USA in 2021. If their growth trend forecast proves to be right, the dollar’s value may increase causing the price of gold to decrease.
- The government’s mega stimulus and fiscal relief packages to ‘help’ during tough times sound promising, but it’s speculated that the US treasury doesn’t have sufficient resources to stay afloat financially. This will potentially lead to inflationary economic conditions, and arise in gold prices, as it’s considered a hedge against inflation by investors.
- If the coronavirus situation isn’t under control, small businesses are expected to file bankruptcies, creating more shocks in the economies worldwide. This can cause gold prices to rise.
- In an attempt to push liquidity and reduce the pandemic’s impact, central banks offer short-term loans. According to the Federal Reserve’s recent meeting, the Fed Funds are likely to remain at 0% during the upcoming years. Low interest rates indicate that gold prices are most likely to rise.
Historically, gold has remained a safe haven due to its intrinsic store of value.
Depending on the global market’s reaction to changes in the inherent value of the dollar, top gold IRA companies and custodians have predicted that gold spots are likely to see an upward trajectory in 2021, surpassing the $2,500 mark.
Investors wanting to protect their savings during a monetary crisis or diversify their retirement portfolios can buy gold bullions or coins online or open a precious metals IRA.
Orion Metal Exchange offers the best gold and silver IRAs with extensive opportunities to make smart and diversified investments by adding gold, silver, platinum, and palladium to your financial portfolio over time.
Connect with our experts to know more about the best gold coins for investment, our secure private vault storage rentals, and more information about making the most profit out of your retirement savings.