After this year's rally, the whole market still has expectations that the gold market will continue to rise next year. Continued easing by central banks around the world will continue to push gold prices.
Gold's record highs this year were driven by inflation expectations, a weak dollar, concerns about the post-epidemic economy, concerns about currency depreciation and low interest rates.
Many of these factors will continue to exist next year.
Peter Hug, director of global trading at Kitco, said that if there is a more positive view, such as the vaccine will soon be distributed to work, then the economy will recover quickly in the second half of next year. In this case, rising inflation becomes very realistic, which is good for gold.
If the global epidemic is brought under control, consumer demand will grow and the economy will recover, which also means inflation.
Vincent Deluard, director of global macro strategy at StoneX, said people will return to real life, but the subsequent impact of the blockade will reduce supply. And the continued blockade allows high-income people to save a lot of money, while low-income people get stimulus checks, so demand will grow and supply will be limited.
Andrew Hunter, a US economist at Capital Macro (Capital Economics), pointed out that inflation is the most important risk to be concerned about next year.
Inflation is likely to rise quickly. Affected by the epidemic, with the rapid return of demand, the inventory of goods is extremely low, the prices of goods and services will rise, and many industries will be subject to various restrictions, and costs will increase. "
Moreover, the Fed's average inflation target means it will not raise interest rates any time soon.
In addition, after a large amount of liquidity has been injected into the market, even if the vaccine can solve the epidemic, it will not solve the huge global debt.
For gold, this means that it will hit a new high next year.
Hug said that if inflation does pick up, gold prices will break through this year's top next year.
Before central banks tightened, gold rose to a level of $2500 to $3000 an ounce. There is at least a year left before austerity comes. "
Hug pointed out that central banks will continue to stimulate and are unlikely to raise interest rates at a time when the economy has been hit hard. So be bullish on the performance of gold.
In addition, the performance of the vaccine next year is a matter of concern.
Hug said that if at least half of the entire population of the United States were not vaccinated, it would be ineffective, the economy would continue to be in trouble, and the Federal Reserve and the US government would continue to stimulate.
"this is also good for gold, and there are macro-positive factors for gold in the whole market."
