• Metals Focus: Gold and Silver will Rise in 2021
• Stockhead: Citi Projects Bull for Silver
• Sharps Pixley: Gold’s Recovery will be Slow but Steady
• Saxo Bank: Commodity Roll Predicts a Strong 2021

Image: Umicore

Metals Focus: Gold and Silver will Rise in 2021

Metals Focus’ Precious Metals reports that macroeconomic conditions will favour gold and silver investments in 2021 despite the positive vaccine news. Covid-19 has boosted the investor demand for safe haven assets leading to gold rallying an all time high in August, which has supported silver as well. The recent vaccine news have driven more pressure on precious metals, but it might not be sustained as there isn’t an expectation of normalcy before mid-2021.

The macroeconomic background will be supportive to precious metals during 2021 thanks to fiscal stimulus, liquidity injections and rising debt levels. This systemic risk should underpin gold investment and drive prices up by 14 % to an average of $2,030. Physical markets are recovering, but there has been a 120 % increase in physical surplus of 1,847 tons. Covid’s disruptions of mine supply will reach a high next year so the gold market will record a massive surplus.

Metals Focus expects to see investment inflows into silver driven by positive spillover from gold. Tactical buying might help it outperform gold which means that gold:silver ratio will continue to fall in 2021. The recovery in silver surplus will mean a seven year high in global supply. The silver market is expected to achieve another uninterrupted surplus next year, which will be absorbed by the investor community.

30.11.2020, Metals Focus

Stockhead: Citi Projects Bull for Silver

Despite pullback silver has risen more than 35% in 2020 and driven silver-focused stocks on the ASX, Stockhead reports. Sentiment has remained positive due to the coming economic stimulus and rebound of industrial activity. However, Citi has been remarkably bullish: in September they reported a technical analysis that predicted a silver price of $40/oz within 6-12 months with upsides of $50 and even $100. At the time of reporting silver price was around $25. They see that the silver deficit will continue in 2021 and call on stocks will drive the prices up.

Bowdens silver mine is gaining approval in New South Wales, the largest undeveloped silver deposit in Australia. An open pit mine could produce an average of 3.4 million ounces of silver a year for estimated 16 years. An aspiring silver miner Manuka Resources is close to actual production. It purchased the Wonawinta silver project in NSW and is expecting to produce 900,000oz of silver from the stockpile before moving to silver oxide refinement. Forecast from the oxide is more than 2 million oz of silver a year for four years. Investigator Resources continues its drilling program at Paris silver project, which they claim is the highest grade non-by-product silver project in Australia.

9.11.2020, Staff Writer

Sharps Pixley: Gold’s Recovery will be Slow but Steady

While gold price is over $200 below August levels and the price progression has been downhill, none of the recent events will have a long term negative impact for the gold price after U.S. Thanksgiving, writes precious metals commentator Lawrie Williams. True recovery, disregarding occasional ups and downs, might be coming as late as the New Year.

Some vaccine-optimists have been getting out of gold, but despite the current news, Covid-19 will continue to affect the economy for months, if not years. Thus it’s wise to keep gold in mind. There are many factors that continue to favor gold: huge economic stimulus, slow rollout of the vaccine, the decline of dollar index to below 92, etcetera.

Williams predicts that gold will overall be marking time until the end of the year, with possible movement being marginally positive. He recommends having faith as the price will be moving upwards again in the 2021.

25.11.2020, Lawrie Williams

Saxo Bank: Commodity Roll Predicts a Strong 2021

Commodities have seen a strong rally in the second half of 2020 and are looking towards post-pandemic recovery in global growth and demand, reports Saxo Bank. Bloomberg Commodity Index has risen by 15 % and the sector already benefits from strong recovery in Asian demand, mainly in China. Investors are also worried about the impact of long-term fiscal spending which will increase the risk of a weaker dollar and rising inflation.

Last crisis left the market with a near decade of small returns, but the past few months have shown a change in attitude towards commodity investments. Agriculture sector has seen a strong recovery due to weather worries and strong export, while China’s demand of metals is on the rise. The energy sector is preparing for the global demand increase from post-pandemic recovery. Charts (see orig. article) show improvements across all three sectors.

Saxo Bank sees a cyclical comeback from Asia in energy and industrial metals. Agriculture sector might have upside price risk due to weather problems such as the La Ninä in South America. Spot market fluctuates but the forward curve points toward a strong 2021 for commodities, while gold will also remain bullish thanks to rock bottom financing rates.

26.11.2020, Ole Hansen

This is Jalonom’s weekly review of interesting precious metal news from different international sources. We wish to offer the reader a compact and quick to read review of weekly news. Especially we focus on news relating to gold investing.