- INN: Silver price development in 2021
- Kitco: Gold strengthens as confidence in fiat currency erodes
- Sharps Pixley: Fed's interest rate hike intentions may challenge gold price development
INN: Silver price development in 2021
The general investment enthusiasm has kept the value of silver above €17/oz for the first time since 2014, but the overall market uncertainty has prevented it from breaking the €24 ceiling. The first six months for silver were bullish: its value reached a 10-month high of €24.73 on June 21. However, by the end of the year, its value stabilized and declined, with the year-to-date low being reached at the end of September at €19.07.In February, silver broke free from the €23 price range with the help of social media, particularly during the r/WallStreetBets community's "silver squeeze" campaign. At that time, its price briefly surged to an eight-year high of €25.30 on February 1, but the value fell back just four days later. Investment demand supported silver in the following months even as social media attention shifted elsewhere.
By the end of September, the value of silver had dropped to €19.07, representing a 15.93% decline from January. The biggest influences in the last quarter were again rising inflation and the looming end of pandemic aid. In November, silver ETPs added 87 million ounces to their annual total, particularly as demand from the green industry grew and physical demand approached a six-year high, with bar and coin purchases increasing by 32% to 263 million ounces.
Despite its strong performance, silver has still remained in gold's shadow. This is most likely due to silver's more speculative nature compared to safe-haven gold.
December 8, 2021, Georgia Williams
Kitco: Gold strengthens as confidence in fiat currency erodes
The U.S. central bank, the Fed, has begun to act to tame the "inflation beast," but according to Hallgarten & Co's Christopher Ecclestone, tighter monetary policy is not reflected in the value of gold this time. "The price of gold only falls for one reason: if central banks brush inflation under the rug," he explains, adding that inflation in the U.S. and England can only be kept in check by raising interest rates. Currently, many investors seem to believe that the Fed can keep the situation under control - but Ecclestone is not so sure. He cites China's major real estate collapses as an example and warns that the same fate soon awaits the entire real estate market. Real estate has been a stable safe haven for 30 years, but now former real estate investors must turn to the next best alternative: gold. According to Ecclestone, the common belief about the impact of high interest rates on the price of gold is incorrect: allegedly, investors borrow money to buy gold, which Ecclestone claims is not true."For most, gold is a way to save."He predicts that the value of gold will rise above 1,770 euros in the next year and continue towards 2,650 euros over the following four years. "The value of gold must rise because people no longer believe in fiat currency," he believes.
December 10, 2021, Kitco News video
Sharps Pixley: Fed's interest rate decisions may challenge the price development of precious metals
The year-on-year inflation has risen to 6.8 percent according to the latest U.S. Consumer Price Index, marking the highest level in 40 years. This has implications for the recommendations made by the Fed's Open Market Committee, as they are expected to raise interest rates to curb inflation.According to Sharps Pixley's Lawrie Williams, it is reasonable to assume that Fed Chair Jerome Powell intends to accelerate the Fed's previously cautious plan to raise rates. This would strengthen the dollar and could, according to Williams, decrease the value of precious metals. Since both the European Central Bank and other banks have maintained very low interest rates, even rumors of an increase have boosted the dollar index.
However, the Fed's plan could still change quickly, so some decisions are likely to be postponed until the committee's next meeting, which will be held on January 25 and 26. Williams believes in the long-term price development of gold.
December 11, 2021, Lawrie Williams
Image: Pixabay
