Gold’s strong start to the new year

Gold has raced off the starting blocks for 2021, hitting a two-month high on Monday.

Trading around $1,946/oz earlier this week, the gold price remains short of the all-time high achieved last August, when it hit an intra-day high of $2,075/oz. 

Despite the dip since then gold investors are sitting on tidy profits. Gold rose by 22% in 2020 and has gained 65% since August 2018. It faces two key issues in 2021. Firstly, the vaccines, which have taken some of the shine off gold, says The Times. 

As a safe-haven asset, the metal attracts less attention when the economy is doing well, as is expected this year. Investment bank analysts are cautious, with HSBC predicting gold will finish 2021 at $1,907; Bank of America predicts $2,060.

Secondly, bitcoin has emerged as an alternative hedge against inflation. The cryptocurrency’s surge may be diverting funds that would otherwise flow into precious metals, Delano Saporu of New Street Advisors Group told CNBC’s Lizzy Gurdus. Investors looking for a hedge against government currency debasement now have more options to choose from. 

Still, if 2021 brings the inflationary scare MoneyWeek has been fretting about for some time, then gold is likely to gain new impetus. This week’s jump is giving gold bugs hope. A store of wealth for thousands of years, there is still nothing quite like gold.

Recommended

Bitcoin: fool’s gold or the new gold?
Bitcoin

Bitcoin: fool’s gold or the new gold?

With bitcoin hitting new highs last week, and close to becoming a mainstream investment, is it really gold for the 21st century?
15 Jan 2021
Four of the best funds for mining profits in gold
Gold

Four of the best funds for mining profits in gold

The gold-price upswing is set to endure, says Max King. These funds look the most promising.
13 Jan 2021
Should you buy into the bitcoin boom, or stick with gold?
Bitcoin

Should you buy into the bitcoin boom, or stick with gold?

People and financial institutions are piling into bitcoin, many hoping it will hedge against relentless money creation and currency debasement. Merryn…
11 Jan 2021
Frisby’s forecasts – what does 2021 have in store for investors?
Stockmarkets

Frisby’s forecasts – what does 2021 have in store for investors?

Dominic Frisby gazes into his crystal ball and makes his predictions for the markets in the year ahead.
6 Jan 2021

Most Popular

Why we won’t see a house-price crash in 2021
House prices

Why we won’t see a house-price crash in 2021

Lockdown sent house prices berserk as cooped up home-workers fled for bigger properties in the country. And while they won’t rise quite as much this y…
18 Jan 2021
Prepare for the end of the epic bubble in US stocks
US stockmarkets

Prepare for the end of the epic bubble in US stocks

US stocks are as expensive as they’ve ever been. How can you prepare your portfolio for a bubble bursting?
18 Jan 2021
It's not just the UK – we're seeing pandemic housing booms across the globe
Property

It's not just the UK – we're seeing pandemic housing booms across the globe

Soaring house prices aren’t just a UK thing, they’re a worldwide phenomenon. And it’s no coincidence – the underlying cause is much the same. John Ste…
18 Jan 2021