Precious Metals in an Unprecedented Year: The Definitive Guide for 2020 and Beyond
With more than 71.6 million confirmed COVID-19 cases, including over 1.6 million deaths, reported to WHO over the year, the bitter-sweet 2020 comes to an end.
COVID-19 has uprooted everything worldwide, prompting changes in economies, geopolitics, and industrial spheres.
Volatile projected GDPs, uncertain global economic growth rates, low-interest rates, a distrust of fiat currencies — especially the US dollar, and many such factors have compelled investors to drive their funds into safer assets.
Before entering 2021, with lots of optimistic hopes and dreams of a prosperous new year, let’s look at a roundup of 2020 and the predicted future of precious metals markets.
Silver
Joe Biden’s Green Infrastructure plan includes changes such as upgraded commuter vehicle systems, incentives to upgrade commercial and housing constructions to suit extreme weather changes, increasing electronic component usage to promote medicinal applications, as well as
5G telecommunications networks. For silver markets, it means a potential increase in demand for silver and its prices.
During 2020, the white metal market displayed resoundingly resilient performance; from a decade long low of US$11.59, silver managed to reach a seven-year high of US$28.32 per ounce in August.
Currently, holding its price range at US$23, analysts have predicted that, during 2021, silver prices are expected to increase.
Lockdown measures in key-silver producing countries, such as Peru, China, and Mexico, halted mine works, may lead to limited production, and spurred price growth rates.
Director of Silver Institute, Michael DiRienzo, says that we’ve surpassed 1 billion ounces in ETPs and are now getting into hard assets like silver.
The primary presumption behind silver hitting the $30 mark during 2021 is the doubtful solidity of the anticipated global economic recovery.
Palladium
Regarded as one of the most valuable of the four precious metals, Palladium underwent a price increase of 59% in 2020.
The lustrous metal’s usage in catalytic converters, one of the more expensive parts of any car, combined with an acute shortage of supply, drove Palladiums prices to a record high.
Automakers make up about 85% of Palladium’s global consumption; statistics from the European Auto Industry Association (ACEA) showed that the pandemic negatively affected auto sales to a 30 year low in the US alone, with a 24.1% drop in the EU, Britain, and the European Free Trade Association (EFTA).
However, interestingly, most of the world’s Palladium is produced by South Africa, Zimbabwe, and Russia, mostly as a byproduct of mining other metals.
In 2020, the overall global supply experienced a 14% extra decline in supply, making the price reach up to $3500 an ounce.
On average, the prices were around $2,050, and experts have predicted them to rise to $2,138 in 2021.
A poll of 32 traders and analysts forecasted averages to boom, continuing into a trade up to $3000 per ounce by the 2nd quarter of 2021 as the market is set to see a sustained higher net speculative positioning given the record-breaking growth during the year.
Platinum
A strong symbol of quality and value, Platinum’s difficult extraction procedures make the shiny white met alone of the topmost valued precious metals.
Apart from jewelry, it is used to curb emissions from diesel-fueled vehicles and has many other industrial applications.
Three-quarters of the world’s platinum supply is mined in Russia and South Africa.
Therefore, any economic or political uncertainties in the regions have a direct impact on the prices of Platinum. If the wider economy is stable, demands shoot up, and so do the prices.
After a seven-year bear market, in 2020, Platinum was priced around $832 to $840 an ounce, while polls suggest that this will average up to $913 to $945 in 2021.
Gold
Investing in gold to make money as gold price forecasts predict a surge in prices: $2,300 per ounce in 2021, $2,200 per ounce in 2022, $2,100 per ounce in 2023, and $2,000 per ounce in 2024.
Based on McKinsey’s research, the precious yellow metal is known to hold its value well amidst economic and political volatiles, making it an excellent hedge in times of elevated inflation rates.
According to research, gold prices have surged more, rather than in proportion to the rise in inflation rates.
Inflation was voted as ‘one of the worst fears’ in 2020, making gold bullions, gold stocks, and ETF’s popular with investors looking to diversify their portfolios and reduce risks.
Goldman Sachs’s gold price forecast predicts a bullish position for the year 2021, suggesting the price to be targeted at $2,300 per ounce.
Although no one can see the future through a crystal ball to definitively highlight which precious metal will perform best, most metals are predicted to perform steadily in 2021, making them an excellent investment option.
During testing times, where global financial markets remain highly volatile, investing in precious metals IRA is a smart way to invest in any kind of precious metals.
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