SMM: although gold prices fell below $1800 / oz last week, Bloomberg Intelligence data show that the path with the least resistance to gold is upward. Gold prices are expected to exceed $2000 an ounce in 2021.
The gold price is simple: it is about $1790 on November 27th, and gold is more likely to rise from this year's high of about $2075 in 2021. A key question about gold and risk is: how can rising debt and quantitative easing be reversed? " Mike McGlone, senior commodity strategist at Bloomberg Intelligence, said in his December outlook.
McGlone noted that debt and massive quantitative easing were enough to sustain the bull market in gold next year, adding that gold had a solid foundation.
"Gold prices may not be as strong as 2018-20, supported by rising volatility in the stock market, but the upward trend in negative yields, quantitative easing and debt / GDP ratios seems unstoppable, providing a solid basis for hedging," McGlone said. The uncertainty of reversing these trends before the pandemic should limit the decline in metal prices. "
According to Bloomberg charts, gold recently fell below $1800 as part of an overall upward trend.
"Gold will continue its upward trend in 2021," the December outlook report said. Entering the support layer towards the end of November should provide the basis for further price increases. A return to the upward tilt of the 50-week moving average by the end of 2020 will provide a comparative advantage for the gold bull market in 2021. "
Gold prices are currently in the midst of a sustained step-by-step rally between $1800 and $2000, McGlone added.
After the Fed raised interest rates for the first time in 2015, gold prices returned to the upward trajectory, with few signs other than to stay on the upward track. Our chart shows that gold is back to good initial support of about $1800 after it jumped above its 50-week average since 2011 in August, "he said.
"by November 25, gold will remain below its 50-week average of around $1755, which will be the first sign of weakness, but the more likely trend will be upward."
Bloomberg said that some unexpected factors are needed to get gold out of the bull market.
"the average, median and pattern support of gold is already close to $1800, and our forecast is that this level will be at the low end of the 2021 range. The average price of spot gold from 2020 to November is about $1760, the midpoint of the year's price range of $452 to $2075. Our chart shows that the annual price of the precious metal is on a clear upward trend, "McGlone explained.
In 2020, prices are about 50 per cent above the five-year average and will be close to $2100 at the beginning of 2021. We think the market is more likely to follow this line, as it did in 2001-11, rather than break through the support line. "
