What does the future hold for the price of gold and silver? This question is on the mind of Canadian precious metals specialists, gold and silver owners, and prospective buyers.
As the gold price inches back towards $2,600 and silver’s price crests $32 per ounce, we’ve been hearing from many experts and analysts about where these prices may reach in the coming months and beyond.
Where is the price of gold going? Read on to find out.
Soaring above expectations
For some analysts, it could be status quo for the next bit. The price of gold won’t likely undergo many major shifts and substantial volatility in the medium term, according to Pavel Grachev, CEO of Polyus, the third largest gold miner in the world, based in Russia, as Kitco writes.
“We still believe the factors that generated the gold rally so far continue to persist and we do not expect major variations in the gold price going forward, at least not for the next 12 months,” Grachev said.
Sean Boyd, president and CEO of Agnico Eagle Mines, told Kitco in a separate article that he foresees where the price of gold is going: “Here we are at $2,000 on the basis of rising debt levels, rising a lot faster than anyone expected. The economy's not keeping up to the growth in debt. There's two ways to go: austerity, which politicians don't have the courage for and the general public doesn't have the appetite for. So it's going to be spend more, print more and try to create inflation. That is perfect for gold.”
Taking a more extended forecast analysis, in June, Goldman Sachs said it believes gold will jump almost 20% from its already record level to reach $2,300 US in the next 12 months on rising concerns over the US dollar’s global position as a reserve currency.
The bank explained its prediction by outlining how continuous streams of stimulus and measures taken by policymakers to fight the economic downturn caused by pandemic “will lead to a significant rise in debt in the future and this in turn will lead to policymakers allowing inflation to rise, boosting precious metal prices.”
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Another report succinctly summed up the factors influencing gold's 2020 bull run that doesn’t show many signs of abating:
- Run-up to the U.S. election, and the expected chaos on Election Day, and uncertainty about the outcome.
- Plummeting global bond yields.
- Injection of liquidity by global central banks, including the U.S. Federal Reserve, and the resulting weakness in the U.S. dollar.
- Global trade tensions and geopolitical risks.
- Surging COVID-19 pandemic.
After a 28% price increase in 2020, the price of gold may drop in the latter months of 2020, according to some bearish experts. Prices could be curbed by any promising news that promotes “risk-on” investor behavior, S&P Global cautioned, adding that promising economic data and hopes of a coronavirus vaccine could lower prices over the coming months.
What’s expected for the price of silver CAD?
We’ve seen where the price of gold could be going, and now it’s time to look at silver. When analyzing the price of silver CAD and where it’s headed, the Silver Institute predicts a symbiotic relationship with gold.
“The annual gain is premised mainly on a positive spill-over from gains in gold, as the yellow metal will continue to benefit from macroeconomic and geopolitical uncertainties across critical economies,” the institute said.
It’s clear that the price of silver CAD has gone through some volatility but the general consensus is that the market has more of an upward bias. What helps is the demand for silver isn’t as heavy as the hunger for gold.
A CIBC analyst wrote recently, “Silver has potential to provide investors with even more torque given the relatively smaller market for silver vs. gold.”
TD Securities, though, sees pain ahead for silver in the short-term, telling media: “Prolonged weakness in industrial demand should keep silver’s recovery under wraps for now. With prices below our trend reversal thresholds, we anticipate firming downside momentum.”
If you’re curious about the volatile nature of silver, read our blog post on the topic, where we discuss how the price of silver CAD trends wiggles all over the place partly because demand for silver is more elastic. As we wrote in 2019, “Silver is required by industrial companies, but this demand is likely to fluctuate due to market conditions. The fact that a percentage of the silver ordered by the industrial industry is used up will affect the supply, which is another reason behind the market's elasticity.”
The pandemic has undoubtedly impacted the prices of gold and silver, and without any sign of abating significantly, we should expect to see more peaks and valleys with these precious metals in the coming months. More often than not, we’re hearing how gold and silver will continue to be comfortable safe havens for investors, especially with the expected recession in sight.
With the gold price surging this year and next, you may be warming to the idea of buying gold, but be sure you work with a reputable gold seller such as GBS who can share their expertise and knowledge of this industry with you.
If you have questions about gold, silver or other precious-metals inquiries, contact us anytime.